Retired Now? But your Mortgage Isn't Yet

Everyone looks forward to their retirement days. You have put in 30+ years in the workforce, now it is time for you to do what you want to do.  Travel, ski, golf, fish, take up a hobby, the list is endless.

Lets go back 20 years. You are working and making good money, maybe your partner is working, also making good money. You buy a house. make  monthly payments on the house  and after 10 years you refinance the house. Kids got to go to college, this is a way for them to go.  So now you are back owing the same amount for the mortgage as you did 10 years ago. You may even refinance again for your children's weddings.

Another 10 years have passed and now it is time to retire. Your mortgage is not paid off and you just realized your pension isn't going to be a big as you thought. Your mortgage payments are eating all that disposable income you were going to fill your days with.
Remember the travelling, skiing, golfing, hobbies, that endless list.

So what does one do?

The wrong way to go--- I have seen this and it is tragic to see people do this. What they do is charge up their credit cards, if those get filled up, they go get more credit cards or a line of credit secured to their house.  They live their life for a few years just like they planned to do it, except without the income they thought they would have. They are now living on CREDIT.

After a few years of juggling their credit card payments, mortgage and line of credit payments,  their world comes crashing down on them.  Sadly, their house goes into foreclosure, their credit cards get shut down and they have a pile of debt in their names.  Not a great way to live out your retirement.

The right way to go--  If you recognize at the start that things must change, you will have an easier and happier retirement life, and we all want that.  The good news is there are a few different ways to proceed to succeed.

1. Sell the family home and buy a smaller condo or home.  This way the equity you do have in your family home and the increase in land value from the time you bought your family home may allow you to pay off the mortgage and also pay off the smaller dwelling. Leaving you mortgage free, with disposable income for your retirement. Or at the worst giving you a smaller mortgage payment with some disposable income.

2. Look into the Canadian Home Income Plan.  (CHIP)  Which is a reverse mortgage. With the equity in your family home, you may be able to pay off your mortgage or most of it, leaving you in the family home and increasing your disposable income since the mortgage payment will be paid or made smaller.

3. See if one of your children is interested in buying a house with a in-law suite.  With the sale of your family home you and your child could share the mortgage payment.  Or you could give them a portion of the proceeds of the sale of the family home, to pay for your in-law suite, which in turn will be the down payment your children will need to buy the home.

4.  If your family home is big enough you could divide it into 2 suites. Living in one and renting the other one out.  This will free up some of the disposable income that you want.

Whichever way you proceed make sure that you do make the decisions before you are in financial trouble.  Because, once you are not making the payments on the mortgage, credit cards, or line of credit,  your options because increasingly less.

If you need more information, give me a call or email me. You can check out my website by
Clicking Here

 

Angela Kroemer, AMP

Mortgage Professional

TMG The Mortgage Group Canada Inc.

TMG Sharie Marie Mortgage Team

Local: 1.250.650.4182

TFP: 1.888.679.0190

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akroemer@mortgagegroup.com

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CHIP Home Income Plan - Reverse Mortgage

Living in the Comox Valley is truly wonderful. So many things to do, so many things to see.
The downside to living here is everything is so expensive. It is okay while you are working and can make a decent wage, or for many people work extra hours to make extra money to do the activities they want.

But once you retire, well that is a different story.

Pensions don't increase at the speed that everything else increases. Was listening to the news the other day and medical went up, property taxes are going up, gas tax going up. Just how does a person on a fixed income make do if they cannot earn anymore money?

The other downside to living here is the medical. If you get sick, the reality is that you have to travel to Victoria to see a specialist, to get medical treatment that they do not do in the Comox Valley. The travelling can be several times a month or several times a year. That extra money for traveling eats into the cash the pensioner may have.

Also, our medicare is cutting down on the items it provides. Now everyone is faced with extra bills for the medical items that medicare will not cover anymore. Even if your doctor says you have to have them.

Stock market -- Thinking that your returns will be at least 5% and finding out that it is only 1%, if you had anything left after all those crashes. So much for that extra income in your retirement years.

The solution can be a CHIP Home Income Plan - Reverse Mortgage if you own your own home. It allows you to stay in your home while getting income from your home to help with all those extra expenses. In the last couple of years there has been an increase of pensioners looking to the CHIP program to get them extra income to live on.


SOME HIGHLIGHTS of the CHIP Home Income Plan - Reverse Mortgage are:



A CHIP Home Income Plan is a reverse mortgage secured by the equity in your home. Unlike a traditional mortgage in which you make regular payments to someone else, a reverse mortgage pays you.

The big advantage with CHIP is that you do not have to make any payments – principal or interest - for as long as you or your spouse live in your home.

A CHIP Home Income Plan is designed exclusively for homeowners age 55 and older. This age qualification applies to both you and your spouse.

You can receive up to 50% of the value of your home.

You can choose how you want to receive the money. CHIP gives you the option of receiving all the money you're eligible for in one lump sum advance, or you can take some now and more later, or you can receive planned advances over a set period of time. You can even combine a lump sum advance at the beginning with ongoing advances over time.

You receive the money tax-free. You can use the money any way you wish.

No payments are required while you or your spouse live in your home. The full amount only becomes due when your home is sold, or if you move out.

You maintain ownership and control of your home. You will never be asked to move or sell to repay your CHIP Home Income Plan. All that's required is that you maintain your property and stay up-to-date with property taxes, fire insurance and condominium or maintenance fees while you live there.

You keep all the equity remaining in your home. In our many years of experience, 99 out of a 100 homeowners have money left over when their CHIP Home Income Plan is repaid. And on average, the amount left over is 50% of the value of the home when it is sold.

Your estate is well protected. We guarantee that the amount to be repaid will never exceed the fair market value of your home at the time it is sold. If your heirs want to keep your home, they can repay the CHIP Home Income Plan from other funds.



If you would like to know more about the CHIP Home Income Plan - Reverse Mortgage, give me a call or email me.



Thank you
Angela Kroemer, AMP
Mortgage Professional
1.888.679.0190
akroemer@mortgagegroup.com
www.ComoxValleyMortgagesToday.com

TMG The Mortgage Group Canada Inc.