F. A. Q.

Reverse Mortgage Frequently Asked Questions (F. A. Q.)

Can I Lose My Home?

No, your home remains yours forever. Unlike traditional mortgages, a reverse mortgage has no monthly payments, making it safer than other options. If both homeowners pass away, the Estate will settle the mortgage balance with the lender.

Can I Get a Reverse Mortgage If I Have an Existing Mortgage?

Yes, you can. The process is similar to switching mortgage lenders. You first need to pay off the existing mortgage with the reverse mortgage and then you can keep any excess funds as tax-free cash.

What is a CHIP Reverse Mortgage?

CHIP stands for Canadian Home Income Plan, offered by HomeEquity Bank. It's a reverse mortgage product that allows you to access your home's equity. It’s one of the three lenders currently offering reverse mortgages in Canada.

How Much Money Can I Get?

You may qualify for 10-55% of your home's appraised value, with a maximum of 55-60%. Key factors include:

• Home's appraised value

• The age of all homeowners

• Home location

• Property type

How Do I Receive the Money?

You have flexible options:

• Lump sum payment

• Monthly payments

• Combination of lump sum and monthly payments

What Are the Pros and Cons?

Pros include accessing home equity without selling and tax-free cash. Cons include slightly higher interest rates and potential long-term financial implications.

What Are the Costs?

• No cost for initial consultation and advice

• Potential fees include appraisal fees, legal fees, closing costs, and administrative expenses

• For more information, read our Costs & Interest Rates article

Who Can Get a Reverse Mortgage?

• Must be at least 55 years old

• Homeowner in Canada (except Yukon)

• Specific property type restrictions apply

How Can I Use the Funds?

The tax-free cash can be used for:

• Travel

• Daily expenses

• Buying/selling real estate

• Personal enjoyment

What Happens If I Want to Pay Off Early?

Like most other mortgages, there are penalties for early termination. Early payment penalties decrease over time. The maximum to be paid is 5% in the first year and after 10 years there are no more penalties.

Do I Still Pay Property Taxes and Insurance?

Yes, you remain responsible for property taxes and home insurance.

Free Professional Consultation

If you have any unanswered questions, uncertainties or would like to go over your specific financial needs and goals, please contact me at mike.a@reversemortgageportal.ca to set up a call. As a CPA, Chartered Professional Accountant, of over 20 years, I know the importance of understanding the full picture before making recommendations. I look forward to learning more about you and your financial needs so I can help you make the best decision.

Don’t forget to ask about our $400 rebate!