Low Rates are Making Reverse Mortgages Attractive

There are many reasons that more Canadians are choosing reverse mortgages as a financial instrument for their retirement. Low interest rates are one of them. In many cases, the interest rate for a reverse mortgage is even lower than a mortgage that someone may have taken out five to ten years ago on their home, making a reverse mortgage a no-brainer way of paying off a mortgage into retirement.

HomEquity Bank now Provides CHIP Home Income Plan
The institution behind reverse mortgages in Canada is a federally registered bank, which means they are able to offer lower interest rates than they have in the past. The cost of borrowing against your home’s equity has never been lower than it is right now.
There are no “gotchas” with a reverse mortgage, and the process of applying for one is regulated so that there never can be. Applying for a reverse mortgage requires legal advice, for one, so you can always be assured that you’ll have a third party looking at the deal for you and ensuring that you are getting the best value for your money.

Use Low Interest Rates to Your Advantage
Pay off your household debt going into retirement. Help family members buy their first homes. Get the money for traveling in retirement that you’ve always wanted but didn’t quite have the ability to put aside. There’s a million ways you can use the money that you could get for a reverse mortgage, and low interest rates mean now is the time to access your home’s equity before they have a chance to go back up.

Use a Reverse Mortgage as a Financial Instrument
If you have a higher-value property that you plan on staying in during your retirement, you may not “need” the money from a reverse mortgage. But think about what you could do with the tax-free money from your home equity on the stock market or in other investments, such as your own small business. A reverse mortgage offers a huge benefit over a home equity line of credit in that you have the option to choose a fixed rate for a period of time with a reverse mortgage. With a home equity line of credit, you are at the bank’s mercy and your interest rates can be increased without your consent at any time. Tap into your home equity that won’t leave you at the mercy of creditors in your retirement with a reverse mortgage.
Want to find out just how low interest rates are on a reverse mortgage? Contact me today for the rates and to answer any questions you have about the application process.

My CHIP Tools

A CHIP Home Income Plan is a reverse mortgage that is the simple and sensible way to unlock the value in your home and enjoy life on your terms. You can use this "My CHIP Tools" section to find out if you and your home are eligible, how much money you could get, and how much equity you would have left in your home after the CHIP Home Income Plan was repaid.
Am I eligible?
Find out right away if CHIP is offered in your area and if you and your home qualify for a CHIP Home Income Plan.

How much money could I get?
The amount you can receive up to 50% of your home's current appraised value. The exact amount available to you will depend upon a number of factors, including your age and the age of your spouse, the value of your home, where your home is located, and the type of dwelling. This tool will show much money you may be eligible to receive.

Future Equity CalculatorFuture Equity Calculator
Use the Future Equity Calculator to determine how much equity could be remaining in your home when your CHIP Home Income Plan is repaid. The calculator predicts future market value of your home based on user-selected home annual appreciation rates.
CHIP provides an interest rate discount if you choose to pay your full annual interest. The interest rate discount is 0.50% and is factored into this calculation.

Angela Kroemer, AMP
Mortgage Professional
TMG The Mortgage Group Canada Inc.
TMG Sharie Marie Mortgage Team
1.250.650.4182

akroemer@mortgagegroup.com
www.KroemerMortgages.com

Your Mobile Mortgage Professional in The Comox Valley

Facebook Page https://www.facebook.com/#!/akroemer

365 Things To Do In Comox Valley   https://www.facebook.com/cvmortgages

Reverse mortgages an income lifeline for some seniors

Reverse mortgages an income lifeline for some seniors

A great article. For more information, give me a call.

Angela Kroemer, AMP
Mortgage Professional
TMG The Mortgage Group Canada Inc.
TMG Sharie Marie Mortgage Team
1.250.650.4182
akroemer@mortgagegroup.com
www.KroemerMortgages.com
Your Mobile Mortgage Professional in The Comox Valley

Canadian Home Income Plan

This week I learnt about the CHIP plan and now I am pleased to be able to offer it to all my past, present and future clients.

CHIP stands for Canadian Home Income Plan.  In a nutshell it is a plan for seniors (55 and up) who own their homes, are able to borrow equity from their homes and use the equity for anything they like.
As you read the information below and find you may be interested in this plan contact me and we can see if this will work for you.

akroemer@mortgagegroup.com
www.comoxvalleymortgagestoday.com
1.250.650.4182


More information below:

ABCs of CHIP

Wouldn't it be nice if you had the money to do more of the things you want to do? A CHIP Home Income Plan could be just what you need. It's the simple and sensible way to unlock the value in your home and turn it into cash to help you enjoy life on your terms.

Let us introduce you to CHIP - Canada's leader in reverse mortgages:

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. That's what has made reverse mortgages such a popular solution in Canada, the U.K., the U.S., Australia and other countries.

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. The specific amount is based on your age and that of your spouse, the location and type of home you have, and your home's current appraised value.

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.

Rebalancing Assets of $400,000

You receive the money tax-free. It is not added to your taxable income so it doesn't affect Old Age Security (OAS) or Guaranteed Income Supplement (GIS) government benefits you may receive.

You can use the money any way you wish. Maybe you want to build up your savings or cover unexpected expenses. Perhaps you want to update your home or help your family without depleting your current savings. The only condition is that any outstanding loans secured by your home must be retired with the proceeds from your CHIP Home Income Plan.

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.



You can save on taxes. If you decide to use the money you receive to buy non-registered investments such as GICs and mutual funds, you may be able to deduct the CHIP Home Income Plan interest charges from the income those investments earn. Be sure to consult a financial or tax advisor.

Posted Rates: Our interest rates start at just 4.75%

We have a variable rate option with no fixed term or if you prefer a fixed rate, we can offer you six-month, one-year, three-year, or five-year terms. Your interest rate will be based on the length of term you choose.

				Annual Percentage Rate (APR) *
Term	Rate	Effective	Reset Date	10 Years	5 Years	3 Years	1 Year
Variable Rate	4.75%	September 9, 2010	As Posted Rate Changes	4.88%	4.98%	5.11%	5.82%
6 months	4.90%	September 9, 2010	March 15, 2012	5.03%	5.13%	5.27%	5.97%
1 year	4.99%	February 14, 2011	September 1, 2012	5.12%	5.22%	5.36%	6.06%
3 years	5.45%	August 25, 2011	September 20, 2014	5.90%	6.00%	6.13%	6.85%
5 years	5.95%	August 25, 2011	September 5, 2016	6.41%	6.51%	6.65%	7.36%

* APR is based on a CHIP Home Income Plan of $150,000.The annual percentage rate (APR), is calculated as the rate of interest of the plan plus closing costs.

Rates are subject to change and will be posted on this site.

You can lower your borrowing costs with an interest rate discount.

• Interest payment discount - if you choose to pay your full annual interest, you will receive a 0.50% discount for the following year. You can pay in a single lump sum or make regular payments.

You have a number of payment options.

• No principal or interest payments are required for as long as you or your spouse live in your home.
• You can choose to pay all or part of the annual accrued interest ($1,000 minimum/year) without signing up for the interest payment discount plan. You can pay once every calendar year when it's convenient for you. If you pay the full year's accrued interest, you will qualify for a 0.50% discount on your next discount review date.
• The full amount only becomes due when you and your spouse pass away, when the home is sold, or if you both move out.
• You have the option to repay the principal and interest in full at any time. When you repay, an interest rate differential may apply. If you repay within the first three years, a prepayment amount will apply. These may be waived or reduced in the event of death or a move to a long-term care facility or retirement residence.

Set-up costs

Appraisal Fee

• Typically from $175 to $400 as an out-of-pocket cost.
• Actual amount varies by province and for urban and rural properties.
• Request for an independent appraisal is ordered through CHIP.

Independent legal advice is required

• Typically $300 to $600 as an out-of-pocket cost.
• Price range assumes no title issues.
• At your request, CHIP can provide a list of legal advisors in your area.
• It is recommended that you discuss fees with the legal advisor before proceeding.

Legal, closing and administrative costs

• Costs are $1,495 for all of our interest rate options.
• These costs will be deducted from your CHIP Home Income Plan funds so they are not an out-of-pocket expense.
• Includes title search, title insurance and registration.

http://www.chip.ca/index.cfm?id=103