Reverse mortgages are an invaluable service brokers can provide to clients 55+
This article was provided by HomeEquity Bank
Canadians are living longer and, as a result, your clients require more savings in order to enjoy their best life in retirement. One of the most effective ways for your clients to save more leading up to retirement is to take advantage of their home equity through a CHIP Reverse Mortgage or Income Advantage and maximize their RRSP contributions.
Most people don’t have a company pension plan to rely on in retirement and, even if they do, it’s often not enough to help finance the retirement life they desire. It doesn’t make sense to work a large portion of life only to be strapped for cash and unable to fully enjoy their retirement years.
Choice of lump sum or instalment payments
With a CHIP Reverse Mortgage, your clients receive the funds in one lump sum, which enables them to access the money all at once and use how they choose. And with the Income Advantage option, they’re given the convenience of monthly or quarterly advances, which can help with budgeting and offers an ongoing boost to their regular income/savings. Both options are great for freeing up cash to maximize RRSP contributions.
Reverse mortgage guarantee
With a HomeEquity Bank reverse mortgage, your clients always retain the ownership of their home and maintain title. They’ll never be forced to move or sell the home, even if their income or home value changes. We guarantee that the amount that your clients or their estate eventually have to repay will never exceed the fair market value of the home at the time it’s sold. If the home goes up in value, the appreciation is all theirs. All your clients have to do is maintain the property, and pay the taxes and insurance.
Reverse mortgage facts for your clients
A reverse mortgage is a loan secured against the appraised value of a home that’s designed exclusively for homeowners aged 55 years and older. It enables your clients to convert up to 55% of their home’s value into tax-free cash, while they remain in the home. And one of the most unique features is that they don’t have to make any regular mortgage payments or pay back the loan until they leave or sell the home.
Since a reverse mortgage is designed exclusively for Canadians over 55, it’s easier to qualify for than other lending options – they’re a Canadian homeowner 55+ and the property must be their primary residence. The amount they qualify for will depend on factors such as their age, the appraised value of the home, its location and the type of home.
Money received through a reverse mortgage won’t interfere with CPP or OAS income and the funds can be used how your client wishes. Popular uses include: retirement planning (RRSP contributions); paying off debts; handling expenses; helping children or grandchildren; improving day-to-day standard of living; home renovations; and making a special trip or purchase.
Helping your clients 55+ unlock some of their home equity through a CHIP Reverse Mortgage or Income Advantage to boost their retirement savings is yet another invaluable service you can provide. Find a BDM near you today.
