About Reverse Mortgages
Reverse Mortgages Explained
A reverse mortgage is a loan secured by the equity in your home. But unlike a regular mortgage you do not have to make any principal or interest payments for as long as you or your spouse live in your home.
These programs are designed solely for homeowners where both spouses are at least 55 years or older. You can receive up to 50% of the value of your home, which can range from a minimum loan of $20,000 to a maximum of $750,000. The specific amount is based on the age of all owners, the location and type of home you have, and your home's current appraised value.
We work closely with Canada's leading Reverse Mortgage Lender, Canadian Home Income Plan (CHIP). For more than 20 years, they've been Canada's only national financial services company dedicated to helping homeowners age 55 and over turn the equity they have built up in their homes into tax free cash. The CHIP Home Income Plan has helped thousands of people who are looking for a simple, sensible way to unlock the value in their homes - homes that they're very comfortable in and don't want to have to sell. Some of them have expressed it this way: "CHIP helps me get the money I need to enjoy life on my terms."
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Reverse Mortgage proceeds are received tax-free.
This money is not added to your taxable income therefore it won't affect the Old Age Security (OAS) or Guaranteed Income Supplement (GIS) benefits you receive or may be eligible for.
You are not required to make any payments as long as you or your spouse live in the home.
You are only required to pay back the loan if you sell your home or you both move out.
You maintain ownership and control of your home.
You will never be required to move or sell your home to repay your reverse mortgage loan. All that is required is that you maintain your property and keep your property taxes, fire insurance, condo and maintenance fees up to date.
You keep all the equity remaining in your home.
On average, 99 out of a 100 homeowners have money left over when their reverse mortgage is repaid, and the average amount left over is 50% of the homes' value when it is sold.
Your estate is protected.
The amount of your reverse mortgage is guaranteed to never exceed the fair market value of your home at the time it is sold, so your heirs don't have to worry about paying off more than your home is worth. They can also pay out the mortgage themselves if they wish to keep the property.
You can save money on your taxes now.
By using the proceeds of your reverse mortgage to purchase income generating investments like GIC's or mutual funds, you may be able to deduct the mortgage interest charges from your income to reduce your taxes owing. As a licenced mutual fund representative I would be happy to discuss this alternative with you.
Qualification is not based on credit or income.
All that is required is that all home owners are over 60 and you own a qualifying property. You can sleep at night knowing that you can stay in your home as long as you like without having to worry about repaying your reverse mortgage loan.
The average Canadian spends years building equity in their home with the expectation that they will be able to enjoy it in their retirement years. But once they retire, many are finding themselves in a position where they may have a solid balance sheet with plenty of equity, but very little cash. Home ownership is no good if you can't afford to maintain it, let alone pay for any other expenses.
Like any business, families need regular recurring income to stay afloat. In your younger years, income is used to build equity and savings for the future. In retirement, it's needed to maintain a lifestyle and standard of living you've become accustomed to. But retirement can bring about a substantial reduction in income, and many seniors are finding themselves house rich and cash poor. For some this can mean little or no enjoyment of their retirement years because they can't afford to travel or do the things they've always wanted to do. For others it could mean not having the money for new windows or to replace the furnace.
A reverse mortgage allows you to unlock the equity in your home so that you have the money to enjoy life without worrying about having to pay it back while you live in your home.[ back to top ]
Anything You Like!
- Get out of debt. Pay off your loans, credit cards and existing mortgage to free up your monthly income. An extra $400 or $800 a month can make a huge difference in your standard of living.
- Do those renovations you've been wanting to do. Not only can it increase the value of your home but it also boosts your enjoyment and pride of ownership.
- Travel the world the way you had said you were going to.
- Help cover some of the costs of your grandchildren's education. Maybe to cover the costs of some of your own education. Take some courses!
- Use the proceeds from your reverse mortgage to create an annual tax deduction as well as a tax efficient monthly income.