🏡 Reverse Mortgages by HomeEquity Bank

A reverse mortgage is a specialized loan secured against the value of your home. It provides you with the ability to release the capital in your home without having to sell or move.

The money you receive is tax-free and can be used for any purpose you wish. It can also be used as financing when purchasing a new property.

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Key Features & How a Reverse Mortgage Works

• No Mandatory Payments: You are not required to make monthly principal payments. You can choose to pay the interest only each month, or no payments at all.
• Interest Accrual: The interest accrues and is added to the original loan balance over time. As a result, the outstanding balance grows as interest is accumulated.
• Repayment Trigger: The loan is repaid when the homeowner:
  • Moves out of the home.
  • Sells the home.
  • Passes away.

Who is a Reverse Mortgage For?

Because it eliminates the stress of regular payments, a reverse mortgage is an attractive option for anyone who:

• Is 55 years of age or older.
• Wants to stay in their current home.
• Is on a limited or fixed income.
• Is transitioning from regular employment to retirement.
• Has a significant equity position in their home.

It can also provide peace of mind and necessary financing during periods of debilitating or prolonged illness, or act as a bridge until you are ready to downsize.  Because reverse mortgages are not qualified with minimum income requirements like traditional “A” mortgages, they typically have higher interest rates and fees associated with setting up the mortgage.

🌟Lender Spotlight: HomeEquity Bank (CHIP Reverse Mortgage)

HomeEquity Bank is a well-known lender in the reverse mortgage space, offering products like the CHIP (Canadian Home Income Plan) Reverse Mortgage and the Income Advantage Mortgage. Their product line has expanded to include the following options:

Product Options & Benefits

Product	Details
CHIP	Receive funds as a lump sum.
CHIP Max	Gives you access to a larger loan amount. This option has a higher interest rate, is only available in select locations, and is subject to HomeEquity Bank’s credit granting criteria.
CHIP Open	A short-term financing solution that has no prepayment penalties for full repayment. This is an excellent way to arrange bridge financing when you are buying a new home, but your existing home has not yet sold.
Income Advantage	Clients enjoy the convenience of monthly or quarterly payments, allowing for greater flexibility and cashflow planning.  Requires a minimum initial advance of $20,000. Minimum monthly payment is $1,000 (or $3,000 per quarter).
HEB Advantage	An innovative solution for clients who want to unlock up to 59% of equity in their home, with minimum interest only payments for a 10 year period.

Eligibility Requirements

To qualify for HomeEquity Bank’s reverse mortgages:

• You must be a Canadian homeowner.
• You must be Age 55 or older.
• You must own your home.
• The property must be your primary residence.
• If there are two spouses on title, both must be at least 55.

Other Interesting Facts

• • The reverse mortgage remains in force even if one spouse passes away.
  • Bed & Breakfast properties are considered on an exception basis if owner-occupied.
  • The mortgage can be registered interalia (registered on multiple properties) up to 3 properties, as long as one of them is your primary residence.
  • Independent Legal Advice (ILA) is required.
  • Initial Set Up Costs: Initial setup costs are approximately $3,000.00 to $5,000 depending on which type of reverse mortgage you obtain; these fees include the set-up fee; the ILA; and the appraisal. Full disclosure of all fees is provided before the application is submitted.

Rates

Available rates will vary based on which product you are taking, and rates are subject to change. For the most current rate information, reach out to Annie directly to receive the most up-to-date rate information.

Prepayment Privileges

Feature	Details
Annual Prepayment	Up to 10% of the outstanding principal and interest can be paid within 30 days of each anniversary date without penalty.
After 5 Years	No prepayment charge if payment is made within 30 days of the reset date.
Penalty Waiver	Can be waived entirely after the 5th anniversary with 3 months’ written notice.

Early Payout & Milestone Penalties

Timeframe	Penalty Details
Year 1 Payout	5% of the outstanding balance
Year 2 Payout	4% of the outstanding balance
Year 3 Payout	3% of the outstanding balance
After 3rd Anniversary	3 months’ interest