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Reverse Mortgages Canada
Reverse Mortgages in Canada are typically promoted to seniors and most specifically those 55 years of age and over. Reverse mortgages can provide funds to those seeking to take existing equity out of one’s home that qualifies under the plan. The most popular reverse mortgage in Canada is offered by HomEquity Bank and is known as the CHIP Mortgage or the Canadian Home Income Plan.
The Canadian Home Income Plan is a reverse mortgage whereby individuals 55 years of age or older are able to access the equity in their home and use the funds for any purposes they desire including repairs, travel, income, and much more. This type of reverse mortgage in Canada enables individuals to access up to 40% of the value of their home. With traditional regular mortgages, individuals are required to make monthly principal and interest payments. The CHIP Mortgage is unlike a traditional mortgage and is a reverse mortgage. A CHIP reverse mortgage does not require an individual to make interest or principal payments.
Reverse Mortgages Alternatives
Reverse mortgage alternatives in Canada are available to some individuals 55 years of age or older. Guaranteedinvestments.com provides individuals with access to a wide variety of income producing investments vehicles. TS Wealth provides individuals with a variety of mortgage solutions to individuals. Advisors at Guaranteedinvestments.com and TS Wealth have over 35 years of investment, mortgage, tax and estate planning experience.
Reverse Mortgage Funding
CHIP and HomEquity Bank are industry leaders in the Reverse Mortgage market in Canada. HomEquity Bank allows for CHIP mortgage clients to borrow the funds from the equity in their home at lower rates than historically being available as a result of company now being able to finance the mortgages themselves.Individuals are allowed to stay in their homes for as long as they wish and are never forced to move out of their home or sell their home.
Reverse Mortgages in Canada have been around for decades and the CHIP Mortgage plan is the most popular product on the market. Although popular, it simply does not mean that it is suitable for individuals as there are many drawbacks to reverse mortgages.
CHIP Reverse Mortgages in Canada and the amounts received are based on a variety of factors including:
• Your age
• The location of your home
• And the type of your home
CHIP Mortgages – Pros and Cons
Pros
• Access to funds from the equity in one’s home
• The funds are received on a tax free basis
• Funds can be used for any purpose one wishes
• Individuals are never forced to move or sell their homes (while alive)
Cons
• Set up fees, legal fees and other fees are high and will probably range between $2000 and $3000
• Home equity is diminished over time
• Higher mortgages rates typically than standard mortgage rates
Things to Consider with Reverse Mortgages in Canada
Prior to establishing and setting up a reverse mortgage, individuals should look at all of their other options including:
• Reviewing all of their investment vehicles to see whether additional cash flow can be generated from one’s existing investments
• Consider if possible setting up a less expensive line of credit or home equity line of credit
• Consider discussing cash flow alternatives with family members including children and grandchildren
• Review registered investment plans including RRSPs and RRIF ( Registered Retirement Savings Plans and Registered Retirement Income Funds)
For additional information or should you wish to discuss reverse mortgage plans, investment and income alternatives and/or mortgage alternatives please contact us or visit our website www.guaranteedinvestments.com and www.tswealth.ca
About Guaranteedinvestments.com
Guaranteedinvestments.com provides conservative risk adverse investors with access to a wide variety of secure investment products including GICs, annuities, guaranteed investment funds, guaranteed minimum withdrawal benefit plans, guaranteed lifetime withdrawal benefit plans and insured annuities. Guaranteedinvestments.com is located on Bay Street in downtown Toronto and services clients across the province. The professional advisors have over 35 years of combined experience and have helped invest and structure investment portfolios totalling in excess of $250,000,000. The experienced financial professionals have credentials including Chartered Financial Analyst, Certified Financial Planner, Masters of Business of Administration, Canadian Investment Manager and many other professional and industry related credentials.
HomEquity Bank and information on the CHIP Mortgage Plan and the CHIP Program Canada can be found at www.chip.ca
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