What is a CHIP Reverse Mortgage?
Your best life is now! Live it well with a CHIP Reverse Mortgage!
A CHIP (Canadian Home Income Plan) reverse mortgage is a loan that is taken out against the current equity of your home. If you are 55 years or older, this could be a great option, as the loan will remain in your home without requiring you to make any payments. In fact, you may be able to access up to 50% of the current value of your property!
Why should I get one?
A CHIP reverse mortgage is secured by the equity in your home. Unlike a traditional mortgage in which you make regular payments to someone else, a reverse mortgage pays you. Many financial professionals recommend a reverse mortgage as a means of supplementing monthly income.
1. Keep your home — stay in your home and community by maintaining complete ownership and control of your home.
2. No payments — with a CHIP reverse mortgage, you never have to make regular payments until you no longer live in the home.
3. Enjoy retirement — the money you access through the mortgage is tax-free. Get your finances under control and gain the freedom to set your own plans and priorities.
Learn more about reverse mortgages and download our free e-book here!
Here is a real-world example of how a CHIP reverse mortgage can make a huge difference in your financial life:
Purpose: A retired couple is fortunate enough to have a long-standing home, in a high-value area of Vancouver. Presently, the home carries significant secured debt and the couple wants to take out a reverse mortgage to refinance, consolidate debt, and eliminate mortgage payments.
Income: Pension income only
Credit: Both had acceptable credit
Challenge: The clients want to cover the secured debt and some credit card debt, but the amount available from the reverse mortgage is insufficient to cover the secured debt, let alone the credit card debt.
Solution: The clients accept an offer from the CHIP reverse mortgage program, which increases the loan amount enough to cover the debt and the closing cost, with a little bit left over. The cost of the increased loan amount was a 25 basis point increase in the mortgage interest rate. To handle the credit card debt, we applied for an unsecured short-term loan with a five-year amortization, which will leave them payment free at the end of the term.
When the mortgage was placed, the clients had $635,000 worth of residual equity in their home. With some assumptions on growth and interest rates, we calculated that the residual equity after 15 years would be $698,000.
Call or email us today for a free consultation. It's your life. It's your mortgage.