Estate Planning With a CHIP Home Income Plan

October 5, 2011 · Print This Article

Most clients want to know exactly what would happen in the event of their deaths, since estate planning weighs heavily on the minds of most retirees. Here is a no-holds-barred look at exactly what happens.

A CHIP Home Income reverse mortgage is essentially a large loan that is secured by adding the giver of the loan to the title of your home as a mortgagee. This means that upon death, you must sell your home and the loan must be repaid. With this in mind, there are some arrangements that you should make with your family when you take out a reverse mortgage.

Appoint Your Spokesperson

You don’t have to let everyone in the family know that you’ve taken out a reverse mortgage, but you should pick one spokesperson from your close family and let them know about your reverse mortgage. The same person should be the one that handles all of your final arrangements.

If you would prefer to keep your financial matters completely private until after your death, make a plan with your lawyer to draw up a will and have a communication plan ready so that their firm can tell your family in the event of your death and ensure that your loan is paid.

Planning for Fluctuating Home Values
If the value of your home depreciates after you take out your CHIP home income loan, you don’t have to worry. You will never have to pay CHIP more than the sale price of your home, even if the loan was for a greater value.

Are Any Fees Payable Upon My Death?

All fees for the CHIP Home Income plan are either paid upon application or are spread out over the term of the loan. You will have to pay any accrued interest upon the sale of your home, but no extra fees.

Can I Pay Off Interest Early?

You can certainly make arrangements to pay off the interest for your loan in advance with the CHIP Home Income Plan to minimize the amount of interest that needs to be paid when the home is sold. Simply contact Horizon Equity to make arrangements at any time.

Can I Make Other Arrangements to Pay Off My Loan?

You can make other arrangements to pay off your loan if your family wishes to keep your home after your death. The loan must be paid in its entirety with accrued interest for the giver of the loan to remove their name from the title. Contact Horizon Equity for more information and we’ll be happy to help you out.