Why would I want to use my equity
As a retiree you may be on a fixed income and if so your main priority should be to enjoy the retired life. You may need or want to take out some extra money to help out with things like to buying a car, doing reno’s on your home, purchasing a home to accommodate a changing life style, using your equity to pay for comforts your fixed income can’t provide, or simply wanting some extra money for traveling.
There are a lot of options available to safely and securely use your equity to work for you! Some options have lower payments and some options even have NO payments. It is important you speak to one of our fully licensed and trained Independent Mortgage Planners to, not only find the right option for you, but also the best fit to accommodate your lifestyle so you can still enjoy the golden years you worked so hard to enjoy!
Purchasing a home on a fixed income
As Independent Mortgage Planners we have done many of these types of mortgages for retirees on a fixed income. Many independent seniors want to maintain ownership of their home but may find they need to down size or change floor plans to accommodate changes to health or lifestyle. We as Independent Mortgage Planners will guide you through the process and help you make the right decision based on your needs and your finances. Our main objective when we go through this process with a fixed income earner is to insure you maintain a quality of life style you’ll be happy with after the pictures are hung. In some cases we may not suggest ownership, as it’s not always a good fit for everyone, but if we see the picture fits and it’s a good choice one of our fully licensed and trained Independent Mortgage Planners will walk you through the process and make sure the outcome is one you’re comfortable with.
Home Equity Line of Credit Option
This is an options some retirees choose to take based on their finances and their equity in their home or purchase. The things to keep in mind are, this product is a variable rate product so it floats with Prime rate. This coincides with the Canada Bank rate and is subject to change over time based on economics and the financial environment.
The plus with this produce is it is an interest only payment product. That means you can use it as you see fit, pay it as you see fit, or just pay the basic interest payment for as long as you own the house the Home Equity Line of Credit option is secured against.
This can be great product, depending of course on your circumstance, based on the fact that it is a low interest product with the means to possible available funds if needed as well as the option for an interest only payment which is generally a fraction of what a regular mortgage payment would be.
Keep in mind, for this product you will have to qualify based on a posted 5 year fixed bank interest rate, so speak with one of our fully licensed and trained Mortgage Planners today to see if this is the right product and option for you!
Amortizing and what that may mean to you
Many times we deal with retired clients on a fixed income and when asked what they are looking for payment wise, some people feel the goal should be to try and pay off their mortgage as soon as possible. This is sometimes an option and if our clients want to and can afford to it’s a viable option. That being said if you have reached your retirement age and you are in the position to be comfortable and stretch your payments, or be on a tight budget and try to maximize your payments you need to weigh your options and see what options are going to best accommodate the lifestyle you want and deserve. This is a GREAT conversation to have with one of our fully licensed and trained Independent Mortgage Planners. They can walk you through ALL your options while exploring where you are at financially and help you make the right choices that can help towards a comfortable retirement.
CHIP Mortgages and how they may work for you
CHIP is geared towards seniors who are 55 or older, own their home and want to stay in their home, but who perhaps don’t have as much cash flow as they’d like to last throughout retirement. Instead of being forced to sell and downsize, CHIP may be just the solution they need.
Chip offers a mortgage as high as 50% of the value of the home, but with NO monthly payment required. That means the client gets to enjoy the use of the money without the burden of having to pay for it from their monthly income. The interest is simply added to the amount given, and CHIP is paid back when the home is sold or the last borrower has left the home.
The approval is based only on age and property/equity. There is no credit check, no income qualification, and no medical requirement.
Because there is no payment required, a sudden rise in interest rates has no effect on your monthly cash flow like it would with a traditional mortgage or line of credit.
CHIP guarantees that the amount owning will never exceed the fair market value of the home. If there was ever a difference, CHIP would absorb that loss.
Contact one of our fully trained and licensed Mortgage Planners today to see if this is an option that will work for you! 1.866.798.2313