(NC) — Financial debt is a dead-weight on the lifestyle of retirees, so before you borrow more money to pay off such obligations, have you considered tapping the equity in your home?
“Reverse mortgages like the CHIP Home Income Plan are designed specifically for Canadian homeowners who don’t want to service a loan over time, or for those with concerns about their financial position in the future,” says Arthur Krzycki, a director with HomEquity Bank. He explained that CHIP works like this:
• Homeowners aged 55 and over can convert up to 50 per cent of their home equity into tax-free cash.
• Unlike other loans on the market, homeowners are not required to service the interest, or repay the principal until they choose to move or sell.
• Although no payments are necessary during the life of the loan, homeowners can elect to pay the interest on a regular basis. You’ll get a break on the rate if you do – and if you change your mind, you can stop servicing the loan any time you choose.
Having the option to pay the money back when the time is right gives you an added degree of flexibility. It’s a choice that is always worth having in an uncertain economic environment.
Ask a financial advisor or a mortgage broker for details – and additional information is also available online at www.chip.ca.