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| Why would I want a Reverse
Mortgage? |
| For the
majority of Canadians, owning a home
provides a sense of financial security and
pride. But it doesn’t do any good having all
of your equity stuck between four walls and
a roof! Aside from actually selling your
home, the safest way to access some of your
equity is through a
reverse mortgage. And
with no monthly payment schedule, a reverse
mortgage gives you the freedom to go from
planning your retirement, to turning your
retirement dreams into reality. |
| What are some common
uses of a Reverse Mortgage? |
Here’s how
some of our clients have used the equity in
their home to improve their retirement
lifestyle:
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Invested the
proceeds to supplement
retirement income |
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Helped grandchildren
with their education |
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Renovated to improve
home value & enjoyment |
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Eliminated existing
debt which required
monthly payments
(credit card, mortgage, or line of credit)
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Able to travel more
often |
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Purchased an
investment property |
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Purchased a
recreational property or
timeshare |
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| How much
money do I qualify for? |
| How much money do I qualify for?
The amount of money you will qualify
for depends on your age and your
appraised home value. To find out
how much you may qualify for, please
fill out our
online
estimate request. |
| Is my home still mine? |
| Absolutely.
A CHIP reverse mortgage does not give up
ownership of your home. Just like a
traditional mortgage, a reverse mortgage is
registered on title, but your home always
remains in your name. You can sell or move
any time you want to. You can also pay back
the reverse mortgage any time you want to.
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| Why is the interest rate
higher on a reverse mortgage than a normal
mortgage? |
| Interest on a reverse mortgage
is typically higher because you can
choose to never make an interest
payment for as long as you’re living
in your home. You’ll still benefit
from your home appreciating in value
and the loan is guaranteed to
never exceed the fair market value
of your house. |
| If I never make a payment,
how much money will be left when I sell my
home? |
In over 21
years of experience, 99% of CHIP Home Income
Plan clients have money left over when the
loan is repaid – about 50% on average. The
reason:
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the reverse mortgage is
ultra conservative (only up
to 40% of the appraised home
value) |
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the fact that house
prices, over the long-term,
will continue to appreciate
in value for most homes |
We will be
happy to provide you with a detailed
projection of how much money will be left.
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| What if housing prices
plummet? |
| If house
prices in Canada plummet, you and your
estate are well protected. With a CHIP
reverse mortgage there is no risk of default
and the loan is guaranteed never to exceed
the fair market value of your home. |
| When is the reverse mortgage
due? |
| The reverse
mortgage is due when you sell your home, or
when you pass away and your estate sells
your home. |
| Can I get a reverse mortgage
on my cottage? |
| Yes, but
depending on where you live, it may be more
advantageous to set-up your reverse mortgage
on your primary residence. |
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How much does a Reverse
Mortgage Cost? |
| There are
three costs to set-up a reverse mortgage:
1. House Appraisal – this usually costs
between $200 - $400 depending on where you
live.
2.
Independent Legal Advice - CHIP Home Income
Plan requires all legal documentation to be
signed in front of a lawyer. If you don’t
have a legal advisor, we will be happy to
introduce you to one in your area that is
familiar with reverse mortgages. Legal
Advice usually costs between $300 - $600.
3. Legal
Fees and Closing Costs – CHIP Home Income
Plan charges $1,495 to cover administration
and legal fees for setting up the reverse
mortgage.
All of the
above costs can be deducted from the
proceeds of your reverse mortgage. Once
completed, there are no ongoing fees,
renewal costs or any other fees for as long
as you have your reverse mortgage. |
| I am moving in less than 1 year – do I have
to pay back my reverse mortgage? |
| With a CHIP reverse mortgage, you are able
to sell or move at any time. If you are
planning on moving & do not want to pay back
your reverse mortgage, CHIP makes it easy
for you to port your mortgage to your new
home. Please contact us if you are planning
on moving. |
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