CHIP Reverse Mortgage Plan

Senior homeowners, ages 60 or older, can access up to $500,000 tax-free with no payments required on the loan until the home is sold or owners move out. The minimum loan is $20,000.

The amount available to the homeowners is based on the appraised value of the home, the age and gender of the homeowners, marital status, property type, and location. CHIP Reverse Mortgages are available in most areas across Canada, on most types of homes such as condos, town houses and houses. Farms may also be eligible.

The proceeds from the reverse mortgage are received as a cash lump sum. Homeowners are initially approved for a maximum sum, but may choose to receive a lesser amount initially and then request subsequent advances on the remaining available proceeds. Being approved for a higher amounts makes sense cost wise as there is no additional expense to be approved for the maximum amount. The advantage being that, anytime in the future, seniors can just make a request for more cash. Since they are already pre-approved they can be advanced more funds - again at the $20,000 minimum Canada reverse mortgage amount.

As part of a well-balanced financial plan, a CHIP Reverse Mortgage in Canada can add new flexibility to a senior’s finances and is an effective way to:

• Create new and tax-efficient sources of income;
• Preserve existing investments for continued growth and income generation opportunities;
• Reduce personal income tax;
• Provide cash resources to fund a large project, purchase a vacation property, fund medical home care, start a new business or hobby, make cash gifts to children and grandchildren, and more.

Unique Advice with CanadaReverseMortgage.com

Our CHIP reverse mortgage expert Gregory Stanley CFP AMP, is a sought after public speaker to financial advisors across Canada. Mr. Stanley is both a Certified Financial Planner and an Accredited Mortgage Professional in Canada. He gives talks primarily in Canada, but also he speaks in Las Vegas - where hundreds of top Canadian financial advisors come listen to him speak about Canadian Reverse Mortgages (Canadian Home Income Plan) and Canadian mortgages in general. He is considered an expert on this topic. From his speaking engagements in the Cities of Victoria, Vancouver, Calgary, Edmonton, Ottawa and Toronto, among other areas, Mr. Gregory Stanley meets other top quality and successful financial advisors. Over the years, relationships have been developed to the point where if a senior writes to Mr. Stanley (www.mortgageconsultant.com ) and asks for way to create better cashflow or improve income Mr. Stanley can refer and recommend a good advisor.

The proceeds or the cash lump sum from a Canada reverse mortgage can be directed to a top financial advisor in your area that is recommended by Greg Stanley. The reverse mortgage gives you the cash you need ... but the advice on how to use it properly ... how to create a good income ... comes from good advice. CanadaReverseMortgage.com would be happy to refer you to such a top and skilled advisor that Mr. Stanley trust's in giving advice to seniors.

Finally, as mortgage brokers, we make sure that a reverse mortgage is the right choice for you. That is why it is important to request an information package from us directly. We will ensure that you get the right mortgage for your own unique situation. If you have not already done so we strongly suggest that you obtain your free - no obligation - information package about reverse mortgages in Canada.

Discounted and Reduced Rates

The longer that you are in a CHIP plan ... rate wise ... it gets cheaper in time. The truth be told, you will pay about 1.5% more per annum in interest 'more' with a CHIP reverse mortgage than a normal conventional mortgage. But for that small interest difference ... there is a big difference in being approved. In a conventional mortgage that banks offer seniors you must qualify for both credit and income. If your credit is poor - no loan. If your income is not high enough - no loan. With CHIP reverse mortgages you are automatically qualified if you have a suitable home (normal home/apartment, in a normal place to live) and are 60 years old or older. And the best feature is that there are no monthly mortgage payments to make (unlike a conventional mortgage or a line of credit).

So while it is true that for the first 3 or 5 years you may pay a bit more for the convenience of being qualified 'easily' ... and for not having to make a monthly mortgage payment ... rates do get cheaper over time. The longer you are in a CHIP reverse mortgage the lender will 'discount' rates ... so 5 or more years you will find that your rates will be as competitive, as low, as any normal conventional mortgage lender.

For this reason CanadaReverseMortgage.com recommends that you only consider a Canada reverse mortgage if you plan to be in it for at least 3 or more years. Over time it will become more and more discounted ... competitive with any other lender for fixed rate mortgages ... and you will enjoy 'nice' rate - at the same time not needing to worry about making any monthly mortgage payments.

Unique Protections and Guarantees Alone among home equity borrowing options, the CHIP Reverse Mortgage offers these unique protections and guarantees:

• No repayment is required while the homeowners continue living in the home.
• The homeowners have complete freedom to sell or move at any time. And if they do move it may be possible to 'port' or transfer all or part of the Canada reverse mortgage to the new home.
• Homeowners will never be asked to move or sell to repay the loan. As with other mortgages, up-to-date payment of property taxes, fire insurance, condominium/ maintenance fees, and maintenance of the property is required.
• The loan amount to be repaid is guaranteed not to exceed the fair market value of the home at the time it is sold, protecting the balance of the senior’s estate.

Tax-savings Opportunities
A CHIP Reverse Mortgage may also assist seniors in their tax-savings strategies. Proceeds from the reverse mortgage are received tax-free and are not added to taxable income. When the proceeds are used to purchase new investments, the interest expense of the loan may be used to offset tax on the new investment income and reduce the overall tax payable.

Terms of Repayment
Because no payments are required on the reverse mortgage while the homeowners are living in their home, interest is added to the outstanding balance and is compounded semi-annually. The full amount only becomes due upon the death of the last surviving spouse, when the home is sold, or when the last surviving spouse moves out. The homeowner may leave the home for up to 12 months before the loan in considered payable, accommodating situations where a senior requires institutionalized medical/nursing home care for a short term.

All or a portion of the accrued interest may be paid once every calendar year, which can reduce the accumulation of interest on the outstanding balance and help preserve greater equity in the home. The minimum interest payment (to pay down accrued interest) is $1000 k.

The reverse mortgage may be repaid in full at any time. If payment is made within 36 months of the advance of funds, a pre-payment amount will apply. An interest rate differential payment may also be required. This will be waived if the reverse mortgage is repaid as a result of the death of the last surviving spouse or reduced if the reverse mortgage is repaid as a result of the long-term medical care institutionalization of the last surviving spouse. After 36 months there is absolutely no prepayment penalties.

A serious commitment to seniors

As mortgage brokers first and foremost we make sure that a CHIP reverse mortgage makes sense. We, along with CHIP, take a serious commitment to seniors in the decision process. It is the core of the way the we do business.

At every stage of their relationship with clients, we work with CHIP to make sure that the senior is fully-informed and comfortable with the decision they are making. Seniors are encouraged to involve their family and their personal financial advisor. We require that a senior seeks an independent legal review of their contract. We can provide you with a list of lawyers who are familiar about reverse mortgages.

If we believe that a reverse mortgage is not in the best interests of a client, or that the senior is being pressured by outside influences, we will discuss that situation frankly and, if necessary, decline to proceed. We always want a senior to make the best decision.

Making the Decision - History of Reverse Mortgages - How to use the Money

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