What's New With CHIP?

 

 

What is a CHIP Mortgage? CHIP Home Income Plan?

Through the CHIP Home Income Plan, homeowners 55+ can access up to 50% of the current appraised value of their principal residence. The exact amount available will depend on the age of the homeowner and his or her spouse as well as the location and type of home.

The funds are tax-free and there are no restrictions on how they can be used – with the exception that any outstanding loans secured by the home must be paid off. You might use the money to invest, to renovate your home, or simply to improve your lifestyle.

Homeowners can choose to take a lump sum or to receive payments over time. No regular repayments are required; the loan does not become due until the home is sold or both homeowners move out. Interest is added on to the original amount borrowed. When the amount is repaid, all remaining equity in the home belongs to the homeowners (or their estate).

You continue to own your home. There is no change in title. You also remain responsible for property taxes, home insurance, and all your regular household bills and home maintenance.

What's New With CHIP?

We have reduced our legal, closing & admin costs – to $0 where a client initially chooses a 5 year interest term; and to $795 where a client chooses an initial 3 year interest term.

How Does The CHIP Advances Get Paid Out

Just a reminder that CHIP clients have a number of different options for receiving their CHIP advances:

(1) can take the full amount approved all in one lump sum, or

(2) can take an initial lump sum ($20,000 minimum) and take the rest later (optional). They can take the rest in two ways: (a) in lump sum draws of at least $10,000 each time, and/or (b) as monthly draws of $500 and up (ie. like an income), or

(3) right from the start, they can take their full CHIP in fixed monthly/quarterly draws of at least $1,000

CHIP advances are not regarded as income for income tax purposes. So, they don’t affect any government benefits customers may be receiving.

These options # 2 & 3 might work well for those who are not comfortable with the risk involved in investing money for income; but would like to have extra monthly income. For example, clients who would like to be able to afford some in-home care so they can stay in their homes longer.

Want more information? Call or email
1.250.650.4182
akroemer@mortgagegroup.com