Many Canadians 55+ find it difficult to adjust their lifestyle after they retire, they finally have the time to do the things they want to do, but not the funds to do so. They are experiencing a shortfall in their retirement funds and may need to supplement their monthly income or supplement their pension income to maintain their standard of living.
Clients want to live the retirement lifestyle they have always dreamed of and maybe want to alleviate the stress of mortgage payments and debts.
Some have distinctive financial needs:
Down payments for children: They may be putting their children’s needs ahead of their own and helping with a down payment on a home. They prefer not to access their RRSP and incurring additional income tax, savings or investment portfolio.
Unplanned Expenses: Unexpected home repair such as a leaky roof. They may have to retrofit their house for mobility reasons or hire an in-home healthcare for day-to-day living, funds are needed to bridge the gap and take care of a necessary cost.
Safeguards are in place to ensure that your equity is kept safe and secure, obliviating many of the misconceptions surrounding reverse mortgages.
You always retain title and ownership of your home
While your home is used to secure the loan and HomeEquity Bank is registered charge on the title – home ownership is not transferred to the bank.
Lending amounts are conservative
HomeEquity Bank lends up to 55% of the value of the home, while factoring in age, property type and property location. The older the client, the higher the loan amount they can qualify for. This is done so that the reverse mortgage arranged so the value of the home never exceeds the loan.
Homes typically appreciate in value
The total value of the home is likely to appreciate over time — especially if it is in a major city. Meanwhile, only the interest on the borrowed amount accrues.
Guarantee – No Negative equity means loan can never be more than the sale price of the home
Many people think that if their home equity depreciates at the time of sale, they/their heirs will end up owing more than the house is worth. HomeEquity Bank guarantees that if the home depreciates in value and the mortgage amount due is more than the gross proceeds from the sale of the property, HomeEquity Bank covers the difference between the sale price and the loan amount (as long as the property taxes and mortgage obligations are meti).
i The guarantee excludes administrative and interest that has accumulated after the due date.
CHIP Open – An exclusive flexible Reverse Mortgage solution – CHIP Open will provide Canadians 55+ with a short-term Reverse Mortgage giving them flexibility to repay 100% of the balance at any time, without prepayment penalties.
What is CHIP Open?
CHIP Open is a Reverse Mortgage designed specifically for clients with short-term financing needs, such as bridge financing, or completing a large renovation in preparation to sell, and it offers the ability to repay in full without penalty. CHIP Open allows your clients to access up to 55% of the equity in their home in tax-free funds, and they are never required to make a payment until they decide to repay the mortgage in full, move, or sell.
Who is eligible for CHIP Open?
Homeowners aged 55+, who meet our standard CHIP eligibility requirements and have a home value over $300,000 may qualify for the CHIP Open Reverse Mortgage.
What is the difference between CHIP Open and CHIP?
CHIP Open has no prepayment penalties when repaid in full and is offered for a three-year term at a variable rate. The CHIP Open interest rate and closing costs are slightly higher than the CHIP Reverse Mortgage, to account for the greater flexibility, including the ability to convert to the CHIP Reverse Mortgage at any time.