Several weeks ago, I wrote a blog entry that I titled “The Top 4 Myths of Reversible Mortgages in Canada.” As the weeks have progressed since, I think it might be time to change that title to “Unlimited Myths of Reversible Mortgages!” Heavens, there is a great deal of mis-information out there on what is actually a very sound, secure and smart decision for my clients everywhere in Canada!
Case in point: A couple days ago, a wonderful couple met with me to discuss their options for a CHIP Reverse Mortgage. They told me that another financial “advisor,” had told them that the Reverse Mortgage took ALL the estimated equity of their home, which would leave them nothing for their estate and children’s inheritance. This is a MYTH!
The CHIP Reverse Mortgage understands that you’ve devoted years of your life to your “nest egg” of a home. For this very reason, the CHIP set up ceiling limits on what amounts can be borrowed in a Reverse Mortgage.
Most of my clients (55 or older), receive approximately 25-30% of the home’s equity in their Reverse Mortgage. If you are 70 years of age or older, you might qualify for as much as 40%, but you also have the option of taking less, of course. In fact, based on your age, CHIP can go as high as 50% of the appraised value of your home.
If your home value continues to rise …
After taking your Reverse Mortgage, your home’s value is likely to continue to rise. When the time comes to sell the home (either via your decision to move elsewhere, or if you’ve passed on), the Reverse Mortgage is paid off based on the ORIGINAL determined amount, plus interest accrued over the time the money has been borrowed. So, while an average 25-40% of the home’s equity at the time of the Reverse Mortgage going into effect is used to pay back the reverse mortgage plus interest if your home continues to appreciate in value the remaining equity is all yours to keep.
What happens if your home’s value falls?
Here’s another win for you: CHIP guarantees that your Reverse Mortgage loan balance will never exceed your home’s market value. This is a tried and true rule, whether your home’s value stays “flat” or dips downward.
With this CHIP guarantee, your heirs are assured of NOT being saddled with an unexpected debt.
Hundreds of Canadians are taking advantage of the CHIP Reverse Mortgage. It’s as simple as calling me toll-free at (866) 223-1794 for an absolutely free, no-obligation consultation with me. Feel free to peruse our Frequently Asked Questions at your leisure, too.
Let’s put the numbers to paper and give you the freeing financial options you deserve!
@Darlene Vilas, Canada’s leading Reverse Mortgage Specialist, www.ReverseMortgageAdvantage.ca