What can the proceeds of a CHIP Reverse Mortgage be used for? Basically anything you want. It’s your home’s equity, therefore it’s your money.
Canadians are increasingly turning to reverse mortgages to live the kind of retirement they deserve.
Having to contend with lower Canada Pension Plan payments, reduced or non-existent company pensions, inadequate retirement savings and the continually rising cost of living, many retirees are struggling financially. This is where the CHIP Reverse Mortgage can help and you only need to be 55 to start using it.
The amount you can borrow depends on a few factors; your age, the value of your home and the location of your home. The maximum loan amount for a customer is 55% of the home’s value (depending on the factors above).
Our clients don’t just use a reverse mortgage to boost their retirement income; they also use it to help overcome the challenges of aging at home, as well as financing a more fulfilling retirement. Let’s take a look at the costs involved and some of the most popular reasons to take out a reverse mortgage.
Most Canadian retirees want to maintain their independence. 93% of them are determined to stay in their home during their retirement, according to a recent Ipsos poll. However, health and mobility issues may need to be addressed and many people need to make changes to their home to make it possible to continue living there comfortably for their remaining years. Comprehensive accessibility renovations can typically cost tens of thousands of dollars, but for many retirees it’s a price worth paying to maintain their independence and stay in their home.
If you’ve been in your home for many years and want to stay there for many more, you will probably be ready to invest in some improvements. Things like AC units, new kitchens and bathroom. draughty windows. All costing several thousands of dollars.
But expenditures don’t have to be restricted to accessibility options or home improvements. Down sizing, moving into a condo apartment, buying new while taking out equity and replacing with a CHIP Reverse mortgage are also options.
Bucket-list vacations or buying a vacation property
For many people, retirement means having the time to really travel and see the world, but vacations, especially more exotic ones, don’t come cheap.
You may prefer vacations closer to home, a reverse mortgage can also be used to buy a vacation property.
Paying off the mortgage and pesky debt
By paying off their current mortgage with a reverse mortgage, retirees can increase their monthly cashflow substantially. Paying off credit card debt, or consolidating debt in general, is another very popular use of the CHIP Reverse Mortgage. It can free you from monthly payments and high interest rates associated with credit cards that can be easily in the range of 18-24%.
Boosting your retirement income
For many of our clients , their income was simply not enough to fully enjoy their retirement or maintain their desired lifestyle. By using the funds from the CHIP Reverse Mortgage, for example $120,000, you would have an extra $1,000 per month, tax-free, for 10 years. This can be the difference between scraping by in retirement and really enjoying it.
Steven Porter is a Licensed mortgage agent with Mortgage Architects, mortgage broker. For advice and service contact Steven Porter, Accredited Buyer Representative, Seniors Real Estate Specialist, Certified Luxury Home Mortgage Advisor and Certified Reverse Mortgage Specialist at 905-875-2582, steven@1800Mortgages.ca. www.1800Mortgages.ca