Everything you need to know about Reverse Mortgages
Let us outline the best options to access your home equity.
REVERSE MORTGAGE (CHIP)
You’ve built equity in your home. Could it help with what comes next?
You can love your home and still wish your monthly budget had a little more room.
Maybe you’re retiring with a mortgage, carrying a line of credit, planning home improvements, or thinking about future care costs. Selling isn’t necessarily what you want, and qualifying for traditional financing on retirement income can be challenging.
A reverse mortgage may allow eligible homeowners aged 55 and older to access some of their home equity without selling, with no required regular mortgage payments while they meet the loan conditions.
That flexibility comes with a trade-off: unpaid interest adds to the balance over time. We’ll help you understand the costs, compare your alternatives, and decide whether it makes sense for you. HomeEquity Bank overview
THREE SIMPLE STEPS:
Here’s our simple three-step plan
1. Tell us what you want to accomplish
Start with a conversation about your home, existing debts, monthly expenses, and plans. Whether you want to improve cash flow or cover a specific expense, we’ll help you identify what you actually need.
2. Compare your options
We’ll review the financing available to you and explain the differences. You’ll see how a reverse mortgage compares with alternatives such as refinancing, a home equity line of credit, or downsizing, including the costs and effect on your remaining equity.
3. Move forward with a clear plan
If a reverse mortgage is the right fit, we’ll guide you through the application, appraisal, and lender requirements. Independent legal advice helps you understand the agreement before signing. We’ll also explain how you receive your funds and what happens if your plans change. CHIP product requirements
Solution: We guarantee the home inspection fee to be paid back in full if the full financing does not work out, its a WIN WIN.
FAQ SECTION
Reverse Mortgage Guide
Common Questions
Designer: Use the existing plus-sign accordion style. Each question below is the collapsed heading; its answer appears when expanded.
1. What is a reverse mortgage?
A reverse mortgage is a loan secured against your home that lets eligible homeowners access part of its value without selling. Unlike a traditional mortgage, it generally doesn’t require regular principal and interest payments while you meet the agreement’s conditions.
Interest still applies. When you don’t pay it, it is added to the amount owing, so the balance grows over time. How reverse mortgages work
2. Who qualifies for a reverse mortgage?
These products generally serve Canadian homeowners aged 55 and older. For HomeEquity Bank’s CHIP products, both you and your spouse must meet the age requirement.
Your home’s location, type, condition, appraised value, and available equity also matter. We’ll review your circumstances and confirm the requirements for the specific product rather than assume that age alone means approval. HomeEquity Bank eligibility
3. Can I qualify with a modest retirement income?
Possibly. Reverse mortgage qualification differs from a traditional mortgage, with significant emphasis on your age and property.
That doesn’t mean there is no review. The lender may check your credit, existing debts, and supporting documents. You also need to keep up with property taxes, insurance, and the other obligations of owning your home. We’ll help you understand what applies to your situation. CHIP application FAQs
4. How much could I borrow?
The amount depends on your age, your home, and the lender’s criteria. HomeEquity Bank advertises access to up to 55% of the home’s appraised value through its standard CHIP Reverse Mortgage, but that is a maximum, not an automatic entitlement.
Any required debt payouts and closing costs reduce the cash you receive. We’ll show you both the proposed mortgage amount and the estimated funds available for your use. CHIP Reverse Mortgage
5. Do I still own my home?
Yes. A reverse mortgage registers a loan against your property; it doesn’t transfer ownership to the lender.
You must continue meeting your obligations, including paying property taxes and home insurance, maintaining the property, and following occupancy requirements. Failing to meet the agreement can put your home at risk. We’ll explain those responsibilities before you commit. CHIP ownership and borrower obligations
6. Can I use it to pay off my mortgage or other debts?
Yes, subject to approval and sufficient available funds. A reverse mortgage can help repay an existing mortgage, line of credit, or other debts.
Existing borrowing secured against your home generally needs to be paid off as part of the transaction, although specialized arrangements may differ. Removing required debt payments can improve monthly cash flow, but it doesn’t erase the debt: you are replacing it with borrowing secured against your home. CHIP uses and existing debt
7. Do I have to take all the money at once?
Not necessarily. Depending on the product, you may be able to receive a lump sum, scheduled advances, or an initial amount followed by additional funds.
The right approach depends on whether you’re paying off debt, covering a large expense, or supplementing your monthly budget. We’ll explain minimum withdrawals, fees, and conditions for future advances. Taking only what you need can help manage interest costs. HomeEquity Bank funding options
8. What are the interest costs and fees?
Reverse mortgage rates are generally higher than traditional mortgage or HELOC rates. Costs may also include an appraisal, independent legal advice, and lender closing fees.
We’ll explain what you pay upfront, what comes out of the proceeds, and how unpaid interest affects your future balance. We’ll use a current quote for your situation rather than rely on an advertised rate alone. Financial Consumer Agency of Canada
9. When does the mortgage have to be repaid?
Repayment is generally required when you sell, permanently move out, or the last borrower dies. Defaulting on the agreement can also trigger repayment.
A move into long-term care or a change in who lives in the home needs careful review. We’ll explain the lender’s rules, including the time your estate would have to arrange repayment. Federal reverse mortgage guidance
10. Can I pay it off early, or use it for short-term financing?
Yes, but the costs depend on the product and timing. Standard reverse mortgages can have prepayment charges and specific payment privileges.
HomeEquity Bank also offers CHIP Open for certain short-term needs, with full repayment permitted without a prepayment penalty. That doesn’t mean the loan has no interest or setup costs. If you expect to sell or repay soon, tell us at the beginning so we can compare suitable options. CHIP Open
11. Will the money affect my taxes or government benefits?
Reverse mortgage proceeds are borrowed money rather than taxable earnings. Receiving them does not itself reduce Old Age Security or Guaranteed Income Supplement benefits.
How you use the money can create separate tax or benefit considerations. If you plan to invest the proceeds or make a significant financial change, we’ll encourage you to review the implications with your tax adviser. Federal guidance on proceeds and benefits
12. What happens to the equity I leave my family?
After the mortgage and other applicable costs are paid, the remaining equity belongs to you or your estate. Because unpaid interest increases the loan balance, a reverse mortgage can reduce what remains for your beneficiaries.
HomeEquity Bank’s No Negative Equity Guarantee limits repayment to the home’s fair market value when its conditions are met. It does not promise that a particular inheritance will remain. We’ll help you consider your future needs alongside your family’s goals. How CHIP’s guarantee works
