Curious about the CHIP Reverse Mortgage by HomeEquity Bank? If you’re a Canadian aged 55 or older, this financial solution could hold the key to tapping into your largest asset, your home. It’s a unique opportunity that allows you to use your home equity for various purposes, from paying off debts to funding home renovations or supporting your loved ones financially. But what exactly is the CHIP Reverse Mortgage, and how does it work? Let’s dive into the details.
What is the CHIP Reverse Mortgage?
Maybe you’ve wondered, “What is the CHIP Reverse Mortgage?” The CHIP Reverse Mortgage is a loan secured against the value of your home and is only available for Canadians 55+. It allows you to unlock up to 55%¹ of the value of your home without having to sell or move. The money you receive is tax-free, and you can use it towards any of your personal needs, such as:
- Pay off debts/Consolidate debt
- Home renovations and repairs
- Unexpected expenses (medical, emergency)
- Financially aid your children/grandchildren
- Improve or maintain your standard of living
- Pay for a vacation or a special purchase
Eligibility
To be eligible for the CHIP Reverse Mortgage, you must meet the following criteria:
- Canadian Homeowner: You need to be a homeowner in Canada to consider this financial solution.
- Age Requirement: Both you and your spouse must be at least 55 years of age.
- Primary Residence: The property in question should serve as your primary residence.
- Home Maintenance: You must maintain the property well, pay your property taxes and insurance, and ensure it is not in default.
- Property Type: Property must be a single family dwelling, detached duplex, triplex, quadruplex, link home, semi detached, townhouse / row house, condo – townhouse/ stacked townhouse, or condo – apartment style
If you meet these criteria, you can unlock tax-free cash with the CHIP Reverse Mortgage in an initial lump sum or scheduled monthly advances when needed.
Why Tap into Home Equity with The CHIP Reverse Mortgage
- Keep your home and maintain ownership of your property: Frequently, people think the bank takes ownership of their home when they get a reverse mortgage. This is not true. HomeEquity Bank lends you a tax-free cash amount based on your home’s value, but you retain ownership of the property. However, you’re responsible for paying property taxes and maintaining the home’s condition.
- No regular monthly payments required: A key perk of the CHIP Reverse Mortgage is that there are no monthly payments. When you eventually move, sell, or pass away, the reverse mortgage, including interest and principal, is repaid from the proceeds of the home’s sale.
- Choose how you plan to spend the money: One of the most significant benefits of the CHIP Reverse Mortgage is that you completely control the loan and can spend it on whatever needs you require.
- The money borrowed is tax-free and does not affect your government benefits: Because you are unlocking home equity, the funds received from the CHIP Reverse Mortgage are not added to your taxable income and do not affect government benefits such as Old Age Security (OAS).
- You will never owe more than the value of your home: The CHIP Reverse Mortgage has a No Negative Equity Guarantee², which means that if you meet your property taxes and mortgage obligations, HomeEquity Bank guarantees that the amount owed on the due date will not exceed the fair market value of your home. If the house depreciates and the mortgage amount owing is more than the gross proceeds from the sale of the property, HomeEquity Bank covers the difference between the sale price and the loan amount.
The CHIP Reverse Mortgage offers Canadians aged 55 and better a flexible and secure way to access their home equity without selling or moving. With no monthly payments required and the ability to use the funds for various purposes, it provides financial freedom and peace of mind. If you’re considering unlocking the value of your home, contact your Dominion Lending Centres mortgage expert to learn more about the CHIP Reverse Mortgage solution.
¹Some conditions apply.
²As long as you keep your property in good maintenance, pay your property taxes and property insurance and your property is not in default. The guarantee excludes administrative expenses and interest that has accumulated after the due date
