Is a reverse mortgage right for you?
What is a CHIP reverse mortgage?
A CHIP reverse mortgage allows Canadians 55 and older to unlock up to 55% of the value of their home to assist with any financial need. The money received from a reverse mortgage is tax-free, there are no health checks to qualify for and no payments are required interest or principal for as long as at least one borrower lives in the home. The homeowner(s) maintains title ownership of the home at all times. The home must be your principal residence and the property can be a house, townhouse, or condo, as long as there is enough equity to qualify.
Reverse mortgage loans can be used to:
● Pay off or consolidate debt;
● Supplement income;
● Finance home renovations or repairs;
● Pay for unexpected medical or emergency expenses;
● Financially aid a family member(s) or,
● Improve your standard of living by paying for a vacation getaway or making a special purchase.
The truth is, debt in retirement used to be a faux-pas, but today, more and more Canadians are entering retirement with growing debt. The average life expectancy is higher than ever and the cost of living is often greater than pension incomes.
Since 2005, HSBC has surveyed more than 140,000 people in 15 countries about retirement. The following are keys findings for Canada:
● Retirees 23% saw their standard of living deteriorate after retiring. 31% feel they did not adequately prepare for retirement.
● Working Age 81% had a major life event hamper their ability to save. 18% had their ability to save hurt by the economy. 37% are not saving for retirement.
● Pre-Retirees 61% worry about having enough money to live day-to-day. 40% are not confident they can maintain a comfortable retirement. 68% worry they will run out of money. 44% are not preparing adequately and 52% cite their mortgage or debts as the reason.
● Non-Traditional Sources of Income 65% point to a domestic second property. 32% consider a foreign second property as a source of funds.
A reverse mortgage is a smart way for seniors to access the equity theyve accumulated in their home as tax-free cash. Despite the fact that reverse mortgages have been in Canada since 1986, there are still a lot of misunderstanding. Much of the media and misinformation about reverse mortgages is rooted in the U.S. In the U.S., there are numerous reverse mortgage providers, each offering different features. HomEquity Bank, the only provider of reverse mortgages in Canada, is a federally regulated Schedule 1 Canadian Bank, which ensures that you have a trusted and secure bank providing you with your reverse mortgage. Over the years, HomEquity Bank has been improving the reverse mortgage program, making interest rates more competitive, adding term options and increasing the amount of home equity a client can access. It is also mandatory for clients to seek independent legal advice before being approved for a reverse mortgage.
After first learning about CHIP from her mortgage broker, Karen used her money to pay off debt that had built up after her husbands stroke. Creditors are no longer calling and she is now free to spend quality time with her husband.
Bill and Linda learned about the CHIP benefits and used the money for much needed home renovations and repairs which they werent able to previously pay for.
Miriam was able to take a trip she always promised herself with extended family and friends without having to take money from her precious retirement savings.
Contact me today if you would like more information on a reverse mortgage and find out if it is the right product for you.
Diane Sainsbury, Certified Reverse Mortgage Specialist
(Simcoe County) 705-445-2584 (Toronto) 416-820-8471
BOC maintains overnight rate target at 1/2 per cent; projects moderate growth in Q2
The Bank of Canada is maintaining its target for the overnight rate at 1/2 per cent. The Bank Rate is correspondingly 3/4 per cent and the deposit rate is 1/4 per cent.
Inflation is broadly in line with the Banks projection in its April Monetary Policy Report (MPR). Food prices continue to decline, mainly because of intense retail competition, pushing inflation temporarily lower. The Banks three measures of core inflation remain below two per cent and wage growth is still subdued, consistent with ongoing excess capacity in the economy. The global economy continues to gain traction and recent developments reinforce the Banks view that growth will gradually strengthen and broaden over the projection horizon. As anticipated, growth in the United States during the first quarter was weak, reflecting mostly temporary factors. Recent data point to a rebound in the second quarter. The uncertainties outlined in the April MPR continue to cloud the global and Canadian outlooks.
The Canadian economys adjustment to lower oil prices is largely complete and recent economic data have been encouraging, including indicators of business investment. Consumer spending and the housing sector continue to be robust on the back of an improving labour market, and these are becoming more broadly based across regions. Macroprudential and other policy measures, while contributing to more sustainable debt profiles, have yet to have a substantial cooling effect on housing markets. Meanwhile, export growth remains subdued, as anticipated in the April MPR, in the face of ongoing competitiveness challenges. The Banks monitoring of the economic data suggests that very strong growth in the first quarter will be followed by some moderation in the second quarter.
All things considered, Governing Council judges that the current degree of monetary stimulus is appropriate at present, and maintains the target for the overnight rate at 1/2 per cent.
Canadian home sales drop in April
According to statistics released today by The Canadian Real Estate Association (CREA), national home sales declined in April 2017.
National home sales fell 1.7% from March to April.
Actual (not seasonally adjusted) activity in April was down 7.5% from a year earlier.
The number of newly listed homes jumped 10% from March to April.
The MLS Home Price Index (HPI) was up 19.8% year-over-year (y-o-y) in April 2017.
The national average sale price rose 10.4% y-o-y in April.
Home sales over Canadian MLS Systems fell by 1.7% in April 2017 from the all-time record set in March. April sales were down from the previous month in close to two-thirds of all local markets, led by the Greater Toronto Area (GTA) and offset by gains in Greater Vancouver and the Fraser Valley.
Actual (not seasonally adjusted) activity was down 7.5% year-over-year, with declines in close to 70% of all local markets. Sales were down most in the Lower Mainland of British Columbia, where activity continues to run well below last years record-levels. The GTA also factored in the decline, with faded activity compared to record levels set in April last year.
Sales in Vancouver are down from record levels in the first half of last year but the gap has started to close, CREA President Andrew Peck. Meanwhile, sales are up in Calgary and Edmonton from last years lows and trending higher in Ottawa and Montreal. All real estate is local, and REALTORS remain your best source for information about sales and listings where you live or might like to.
Homebuyers and sellers both reacted to the recent Ontario government policy announcement aimed at cooling housing markets in and around Toronto, said Gregory Klump, CREAs Chief Economist. The number of new listings in April spiked to record levels in the GTA, Oakville-Milton, Hamilton-Burlington and Kitchener-Waterloo, where there had been a severe supply shortage. And with only ten days to go between the announcement and the end of the month, sales in each of these markets were down from the previous month. It suggests these housing markets have started to cool. Policy makers will no doubt continue to keep a close eye on the combined effect of federal and provincial measures aimed at cooling housing markets of particular concern, while avoiding further regulatory changes that risk producing collateral damage in communities where the housing market is well balanced or already favours buyers.