55 or older? Live life on your terms with a CHIP Reverse Mortgage!
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 wanted 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 wanted to cover the secured debt and some credit card debt but the amount available from the reverse mortgage was insufficient to cover the secured debt, let alone the credit card debt.
Solution: The clients accepted an offer from the CHIP Reverse Mortgage program, which increased 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 cards, we applied for an unsecured short-term loan, with a five-year amortization, will leave them payment free at the end of the term.
Of note, when the mortgage was placed, the client’s had a residual equity in their home of $635,000. With some assumptions on growth and interest rates, we calculated that the residual equity after 15 years would be $698,000.
What is a CHIP Reverse Mortgage
A CHIP Reverse Mortgage is a loan that is taken out against the current equity of your home. It is the perfect option for if you are 55 and older as it will remain in your home without making any payments. The interest on reverse mortgages begins to gather, and the equity that has gathered in a home will decrease with time. You may be able to access up to 50% of the current value of your property!
The three biggest benefits of a CHIP Reverse Mortgage
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 to supplement monthly income instead of selling, taking out a conventional mortgage or a line of credit.
- Keep your home: stay in your home and community by maintaining complete ownership and control of your home.
- No payments: with a CHIP reverse mortgage, you never have to make regular payments until you no longer live in the home.
- 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.
A CHIP Reverse Mortgage could be just what you need. It’s the simple and sensible way to unlock the value in your home and turn it into cash to help you live your life well on your terms.
Call or email us today for a FREE consultation. It's your life. It's your mortgage.