CHIP Home Income Plan Rates Get More Competitive
July 15, 2012 · Print This Article
If you needed another reason to start looking at a reverse mortgage, interest rates with the CHIP Home Income plan just got more affordable for Canadian seniors. The CHIP 5-year fixed rate is down to 5.50% as of June 2012. Additionally, CHIP is running a 1-year fixed rate promotion at 4.25% for new clients.
No Monthly Payments With a Reverse Mortgage
While these rates put reverse mortgages closer to home equity line of credit (HELOC) rates, the two products are not comparable. With a reverse mortgage, no repayment is required on interest or otherwise until you sell your home. While some of our clients choose to pay interest annually, this is not a requirement.
Lower Rates Lead to More Recommendations
Financial professionals are more likely to recommend a reverse mortgage to solve cash flow problems in retirement at lower interest rates. If you have a financial adviser, ask them about a reverse mortgage after getting more information from Horizon Equity. Part of the application process for a reverse mortgage is consulting a lawyer for legal advice about a reverse mortgage, and they’ll advise you as to whether or not a reverse mortgage is a wise decision for you. Rest assured that reverse mortgages would not be so popular among Canadian seniors if the financials and terms weren’t sound.
Lower Rates Mean More Possibilities
Have you been itching to make an investment but have avoided the opportunity because of the high costs of borrowing? Maybe you are looking at financing a cottage purchase or something else to bring joy to your family. Whatever it is, lower interest rates make it possible now.
Reverse Mortgage not a “Quick” Solution
While the interest rates may be low, the process of applying for a reverse mortgage can take a little while. It will essentially take as much time as a real estate purchase, since you have to have an appraisal, meet with a lawyer, and sign documents. It is also not advisable to take out a reverse mortgage for any amount under $10,000 since the setup costs for the appraisal and legal advice are usually between $1000 and $2000, depending on the appraiser and lawyer you choose.
While interest rates will certainly remain low for a while, they won’t stay this way forever. Get in touch with Horizon Equity today to find out more and to start the application process.