Frequently Asked Questions
Who is eligible for a Reverse Mortgage?
Homeowners age 55 or older (all owners must be at least 55 years of age). The home must be your principal residence. The property can be a house, townhouse, or condo, as long as there is enough equity to qualify.
1. Can I lose My Home?
You will remain the owner of your home and can stay in it as long as you wish! CHIP will never ask you to move or sell. You are required to pay your property taxes and home insurance and keep your property in good maintenance.
2. How different are Reverse Mortgages in Canada from the US?
A Reverse Mortgage in Canada differs greatly from reverse mortgages offered by our American neighbours. In The US there are numerous reverse mortgage providers, each offering different features. Much of the media and misinformation about reverse mortgages is rooted in the US. HomEquity Bank and Equitable Bank are the only providers of Reverse Mortgages in Canada and are federally regulated Schedule 1 Canadian banks, which ensure you have a trusted and secure bank providing you with your Reverse Mortgage.
3. How have Reverse Mortgages improved in Canada?
The Canadian Home Income Plan (CHIP) was founded in 1986 by William Turner. The program was initially offered in Vancouver and by 2001, the CHIP Reverse Mortgage was available across Canada. In 2009, HomEquity Bank officially became a Chartered Bank and later that year became a Schedule 1 Canadian Bank. Over the years, HomEquity Bank has been improving the CHIP Reverse Mortgage, making interest rates more competitive, adding term options and increasing the amount of home equity a client can access. HomEquity Bank has also made it mandatory for clients to seek independent legal advice before being approved for a reverse mortgage.
4. What if The Home Owner Can't Afford The Payments?
There are no monthly payments required as long as the homeowner is living in the home.
5. What if The Homeowner Has an Existing Mortgage?
For clients that have an existing mortgage, the first step we will take is to pay off your conventional mortgage along with any other secured debt.
6. What Fees Are Associated With a Reverse Mortgage?
There are one time fees to arrange a Reverse Mortgage such as an appraisal fee, fee for independent legal advice as well as a fee to the bank for administration, title insurance and registration. With the exception of the appraisal fee, these fees are paid for with the funding dollars.
7. Should a Reverse Mortgage Only be Considered as a Loan of Last Resort?
No. Many financial professionals recommend a Reverse Mortgage to supplement monthly income instead of selling and downsizing or taking out a conventional mortgage or a line of credit.
8. What is The Difference Between a Reverse Mortgage in Canada vs The U.S.?
In Canada ALL applicants must be over the age of 55. In the U.S. only one applicant must be at least 62. If you have seen terms such as HUD, HECM, AARP, FHA these only relate to U.S. Reverse Mortgages and not Canadian. Borrowers in Canada have far more protection than our American neighbors.