What do you do when your dream home is available but you need time before selling your old home?
This article was produced in partnership with HomeEquity Bank.
Explore how HomeEquity Bank’s CHIP Open product can be leveraged as a strategic bridge financing tool.
Your client may be eager to find their next home and secure the place they love but want to take their time transitioning over and selling their existing home.
This is a common situation as some clients want to do renovations such as painting, installing new windows, etc., and move into their new home when ready.
As a mortgage broker, you may wonder what financial solution you can recommend to make the purchase and transition into the new home as easy as possible.
One solution growing in popularity among Canadians 55 and better is leveraging HomeEquity Bank’s CHIP Open product as a strategic bridge financing tool.
The sudden sale, and the bridge between
How would this work in a hypothetical situation? Let’s take the Johnsons as an example.
This couple, in their mid-70s, lives on a two-acre $2 million property in Chilliwack, British Columbia. The property is becoming hard to maintain, and they are now looking to purchase a townhouse. The Johnsons have two acres of land to sort out and move but want to take their time and get situated before putting up the for-sale sign.
The Bank couldn’t approve the Johnsons for the $650k they needed to purchase the townhouse they wanted since they just have basic OAS and CPP.
Finding the right bridge to get Canadians 55+ in their new home
CHIP Open by HomeEquity Bank is a reverse mortgage ideal for short-term financing situations like the Johnsons. CHIP Open allows clients to access the equity in their home, convert it to tax-free cash, and does not require regular monthly mortgage payments.
With CHIP Open, the Johnsons accessed $650,000, allowing them to purchase their new townhouse with no debt servicing and no monthly payments to make.
CHIP Open allowed the Johnsons to transition to their new home and get their previous home ready to sell for maximum value.
After the house was sold, they repaid the full amount owed to HomeEquity Bank on CHIP Open.
Key benefits of CHIP Open
HomeEquity Bank’s SVP, Broker Channel, Rene Quercia has identified four key benefits of CHIP Open:
- Time: Clients can savour the luxury of time, eliminating the need to uproot their entire life within a single weekend. The daunting task of moving becomes manageable as they sort, pack, and store belongings.
- Flexible dates: Clients can purchase their new home with flexible dates, making their offer more attractive than others bidding on the same home. Clients can also sell their current home with flexible dates, potentially earning them a higher sale price for someone willing to pay more for dates that meet their needs.
- Option to time the market: With no monthly mortgage payments to make, your clients don’t have to accept the first offer on the home they are selling and can reject low offers. They can wait things out and maximize their sale price. Should the market take a major downturn and they cannot sell, they can convert CHIP Open to the standard CHIP Reverse Mortgage and wait until the market picks back up.
- No debt servicing: Most clients don’t income qualify to purchase their next home before selling their current home. CHIP Open makes this scenario attainable, enabling a seamless transition to the next chapter of their lives.
Read more: When is the best time to sell a property in the Greater Toronto Area?
For more information on how CHIP Open can help your 55+ clients, visit us online or contact a Business Development Manager today.
