The ABC’s of CHIP Home Income Plan

The ABCs of CHIP Home Income Plan

Have you ever said to yourself, "Wouldn’t it be nice if I had the money to do more of the things I want to do?" Now you can get the money you want with a CHIP Home Income Plan. It’s a simple and sensible way to unlock the value in your home and turn it into cash to help you enjoy life on your terms.

Let us introduce you to CHIP:

A CHIP Home Income Plan is a loan secured by the equity in your home. The big difference is that you do not have to make any payments – principal or interest – for as long as you or your spouse live in your home.

A CHIP Home Income Plan is designed exclusively for homeowners age 60 and older. This age qualification applies to both you and your spouse.

You can receive up to 40% of the value of your home. This can range from a minimum of $20,000 to a maximum of $500,000. The specific amount is based on your age and that of your spouse, the location and type of home you have, and your home’s current appraised value.

Simply call or email us to find out how much you could get from your home equity today.

Rebalancing Assets of $400,000       

You receive the money tax-free. It is not added to your taxable income so it doesn’t affect Old Age Security (OAS) or Guaranteed Income Supplement (GIS) government benefits you may receive.

You can use the money any way you wish. Maybe you want to build up your savings and have extra income to cover your expenses. Perhaps you want to update your home or help your family without depleting your current savings. Or you have debts and monthly payments you’d like to get rid of. The only condition is that any outstanding loans secured by your home must be retired with the proceeds from your CHIP Home Income Plan.

No payments are required while you or your spouse live in your home. The full amount only becomes due when your home is sold, or if you move out.

You maintain ownership and control of your home. You will never be asked to move or sell to repay your CHIP Home Income Plan. All that’s required is that you maintain your property and stay up-to-date with property taxes, fire insurance and condominium or maintenance fees while you live there.

You keep all the equity remaining in your home. In our many years of experience, 99 out of a 100 homeowners have money left over when their CHIP Home Income Plan is repaid. And on average, the amount left over is 50% of the value of the home when it is sold.

Your estate is well protected. We guarantee that the amount to be repaid will never exceed the fair market value of your home at the time it is sold. If your heirs want to keep your home, they can repay the CHIP Home Income Plan from other funds.

You can save on taxes. If you decide to use the money you receive to buy non-registered investments such as GICs and mutual funds, you may be able to deduct the CHIP Home Income Plan interest charges from the income those investments earn. Be sure to consult a financial or tax advisor.

You can choose your interest rate option with a fixed or variable rate.

Fixed interest rates are available for six-month, one-year, three-year, or five-year terms. Your interest rate will be based on the length of term you choose.

Our variable rate option has no fixed term and is based on the current bank prime rate.

Based on a CHIP Home Income Plan of $80,000, the annual percentage rate (APR) ranges from 10.55% to 10.76%, depending on the term of the plan. The APR is calculated based on one year of interest at the initial rate plus closing costs.

Rates are subject to change, please contact us for a updated rates.

You can lower your borrowing costs with interest rate discounts.

• Long-term escalating discount – regardless of the interest rate option selected, after three years, the rate at that time will be discounted by 0.25% and will be discounted an additional 0.25% each year thereafter to a maximum of 1.00%.

• Interest payment discount – if you choose to pay your full annual interest, you will receive a 1.00% discount for the following year. You can pay in a single lump sum or make 12 monthly payments.

• You can take advantage of both discounts up to a maximum of 1.50%.

You have a number of payment options.

• No principal or interest payments are required for as long as you or your spouse live in your home.

• You can choose to pay all or part of the annual accrued interest ($1,000 minimum/year) without signing up for the interest payment discount plan. You can pay once every calendar year when it’s convenient for you. If you pay the full year’s accrued interest, you will qualify for a 1% discount on your next discount review date.

• The full amount only becomes due when you and your spouse pass away, when the home is sold, or if you both move out.

• You have the option to repay the principal and interest in full at any time. When you repay, an interest rate differential may apply (limited to 3 months’ interest). If you repay within the first three years, a prepayment amount will apply. These may be waived or reduced in the event of death or a move to a long-term care facility or retirement residence.

There are some set-up costs. The fees for an independent home appraisal are typically $175 to $400. The amount varies by province and whether you’re in an urban or rural area. Fees for independent legal advice are typically $300 to $600. In addition, legal & closing costs of $1,285 are deducted from your CHIP Home Income Plan funds so they are not an out-of-pocket expense

For more information or to apply today, call Mike Hatch direct 613-203-2030 or email to info@ottawashometeam.com .

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