• Loan secured by the equity in your home
   
• You do not have to make any payments – interest or principal – as long as you or your spouse lives in your home.
   
• You maintain ownership and control of your home while enjoying the benefits of having converted some its value into cash.
   
• Designed exclusively for homeowners 60 and older. This age qualification applies to both you and your spouse.
   
• You can receive from $20,000 to a maximum of $500,000 from your home equity. The amount you can receive is 10% to 40% of the value of your home. The specific amount is determined by the current appraised value of your home, your age and that of your spouse, and the location and type of home you own.
   
• You receive the money tax-free. Because it’s a loan, it’s not added to your taxable income, so it doesn’t affect Old Age Security or Guaranteed Income Supplement benefits you may receive.
   
• No payments are required while you or your spouse live in your home. The full amount only becomes due when your home is sold, or if you move.
   
• You can save on taxes if you decide to use the money to buy non-registered investments such as GICs or mutual funds – you may be able to deduct the interest charges from the income those investments earn.
   
• You can choose your interest rate term. Your interest rate will be based on the length of term you choose – six months, one year, or three years.
   
• You receive automatic interest rate discounts, given based on the length of time you have your loan and on the outstanding balance.

BENEFITS OF A REVERSED MORTGAGE

• Create additional cash flow – supplementing monthly income by investing to generate additional funds to eliminate debt or enhance lifestyle.
   
• Top up RRSP contributions – homeowners who are not yet 70 years old with unused RRSP room can make a sizeable contribution to build their assets and gain valuable tax deductions that can be used now or in the future. It may even improve eligibility for certain income-tested government benefits.
   
• Asset preservation – by delaying or reducing RRIF withdrawals above the annual minimum, by holding on to current assets and avoiding capital gains on the sale of some investments.
   
• Lifestyle enhancements – eliminate existing debt, make home improvements, assist children or grandchildren, invest in a hobby or a new business, purchase a second property, pay for in-home help or medical care.

For more information on this subject, or to find out if a reversed mortgage is right for you, visit the CHIP Home Income Plan website www.chip.ca.


Theresa Wever and the Money Concepts Team.

Commissions, trailing commissions, management fee and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.