Is Home Income Reverse Mortgage For You?

January 2, 2013

Home equity loan reversed mortgage for seniors

Home Income Plan – A Reverse Mortgage

h the Canadian Home Income Reverse Mortgage, money in your home becomes available for you to do things you really want to do. CHIP Home Income Plan is Canadian “reverse mortgage” secured by the equity in your home. You do NOT require to make any payments on your reverse mortgage  – no principal or interest payment for as long as you, or your spouse, reside in your home.

The money is tax-free and it will NOT be added to your taxable income. It will not affect your Old Age Security (OAS) or the Guaranteed Income Supplement (GIS) benefits.

Reverse mortgages have become the simple and practical choice for many seniors across Canada, United States, United Kingdom and Australia. CHIP us subject to age qualification and has a limit to the loan you can get.

Reverse Mortgage up to 50 per cent of the Value of Your Home

The loan you are eligible to receive from your reverse mortgage is based on:

  1. The age of you and your spouse
  2. The type of home you own
  3. The location of your home
  4. The current value of your home

You are free to choose

You can decide how you wish to receive your funds.

  1. Receive one lump sum payment
  2. Spread out your payments – one for now and another at a later date
  3. Get a lump sum now with ongoing payments to you over time
  4. Receive planned payments over a period of time

A CHIP Home Income Plan in Canada has a variable rate option with no fixed term or, if you can choose to have a fixed rate of six-month, one-year, three-year, or five-year terms. Your interest rate will be based on the length of term you choose.

You Decide Your Payment Options

  1. No principal or interest payments are required for as long as you or your spouse lives in your home.
  2. Pay all or part of the annual accrued interest ($1,000 minimum/year) without signing up for the interest payment discount plan.
  3. You can pay once every calendar year when it’s convenient for you
  4. You will qualify for a 0.50% discount on your next discount review date if you pay the full year’s accrued interest.
  5. The loan owing becomes due when you and your spouse pass away, when the home is sold, or if you both relocate.
  6. You have the option to repay the principal and interest in full at any time, an interest rate differential may apply.  Within the first three years, a prepayment amount will apply if you repay your loan. These may be waived or reduced in the event of death, a move to a long-term care facility or retirement residence.

Set-up Costs

Appraisal Fee

  1. Typically from $175 to $400, amount varies by province and properties.
  2. Independent appraisal is ordered through the providers of the home income plan.

Independent legal advice is required

  1. Typically cost for legal advice – $300 to $600
  2. Price range assumes no title issues.
  3. You discuss fees with the legal advisor before proceeding.

Costs – legal, closing & administrative

  1. Costs are $1,495 for various interest rate options.
  2. These costs will be deducted from your home income reverse mortgage funds.
  3. These costs include title search, title insurance and registration.
  4. They are not an out-of-pocket expense.

Kindly contact me (Elsie Tse) at 604-716-3369 or Email Me 

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