More Related Content Similar to Everything you wanted to know about reverse mortgages (but were afraid to ask) (20) 2. 2© 2015 HomEquity Bank. All rights reserved.
Everything You Wanted to Know About Reverse
Mortgages (But were Afraid to Ask…)
Myths
debunked
Uses and client
types
HomEquity
Bank’s products
How someone
qualifies
Questions
What is Reverse
Mortgage
What makes the
product Unique
1
2
3
4
5
6
AgendaAbout HomEquity Bank
Over 30
years in
business
The only
provider
of reverse
mortgages
in CanadaA Schedule
1 Bank
since 2009
Consistent
double-digit
yearly
originations
growth
3. 3© 2015 HomEquity Bank. All rights reserved.
What Is a Reverse Mortgage?
So what is a Reverse Mortgage…
Very simply a
Reverse Mortgage
is a lifetime loan
secured against
the value of a
client’s home with
no mortgage
payments
required1.
Clients can
convert part of
their home equity
into cash, tax-
free.
Clients will not
owe more than
the value of their
home and are
only asked to
repay the loan
when they vacate
their home2.
It is available to
mature Canadians
age 55 and older.
Clients maintain
complete
ownership and
control of their
home.
1. Clients are required to pay property taxes and home insurance, and keep property in good condition.
2. Provided the client has paid property taxes and home insurance, and has kept the property in good condition.
4. 4© 2015 HomEquity Bank. All rights reserved.
What Makes The Reverse Mortgage Unique?
For these reasons and more, a reverse mortgage can
empower older Canadians to live a better retirement.
Regular mortgage
payments are not
required until clients no
longer live in the home
Provided the mortgage
is in good standing,
clients will never be
forced to move or sell
Proceeds are
tax-free
Ability to unlock up to
55% of their home
value into cash
Clients can
confidently expect to
still have equity in
their home if they
ever decide to sell
$
$
5. 5© 2015 HomEquity Bank. All rights reserved.
Myths Debunked
FACTS
A reverse mortgage is a lifetime product, and as long as property taxes and
home insurance are in good standing, the property remains in good
condition, and the homeowner is living in the home, the loan would not be
called if the house decreases in value. Reverse mortgages provide peace-of-
mind that the homeowner can stay in their home as long as they’d like.
The bank can force the
homeowner to sell or can
foreclose at any time.
The homeowner always maintains title ownership and control of their
home, and they have the freedom to decide when and if they’d like to
move or sell.
The bank owns the home
HomEquity Bank’s conservative lending practices allow clients to take a
maximum of 55% (33% on average) of the home’s appraised value. In fact,
over 99% of clients have equity remaining in the home when the loan is
repaid.
Borrowers with a reverse
mortgage will owe more
than their house is worth
MYTHS
6. 6© 2015 HomEquity Bank. All rights reserved.
Why Do People Use A Reverse Mortgage?
I need to
pay for an
unplanned
expense
“
”
I need to
alleviate the
stress of
debt
“
”
I want to
improve my
lifestyle“
”
I need to
maintain my
standard of
living
“
”
Mortgage payments
Credit Card Bills
Car Payments
Leaky Roof
Flood
Home Renovation
Vacations
Summer Home
Entertainment
Monthly Income
Supplement
Augment Pension
Income
7. 7© 2015 HomEquity Bank. All rights reserved.
Product Options
I need to
pay for an
unplanned
expense
“
”
I need to
alleviate the
stress of
debt
“
”
I want to
improve my
lifestyle“
”
I need to
maintain my
standard of
living
“
”
8. 8© 2015 HomEquity Bank. All rights reserved.
CHIP Reverse Mortgage
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Thousands
Thousands
Year
• Because clients can take the full value of the mortgage up front and they generally qualify for more under
CHIP, it is ideal for clients who want to pay down debt or have large unplanned expenses.
• Below is an illustration of how the CHIP Reverse Mortgage works for a $500,000 home and an initial advance
of $195,000.
Home Equity ($336,000)
Interest ($246,000)
Initial Advance ($195,000)
Home Equity ($305,000)
Home price appreciation assumed to be 3% annually
Interest rate: 5.49%
For illustration purposes only. External factors not accounted for in the calculations may affect future projections. This information is not intended as specific financial, accounting, legal, or tax advice.
9. 9© 2015 HomEquity Bank. All rights reserved.
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Thousands
Thousands
Year
Income Advantage
• Because clients can schedule advances monthly or quarterly, Income Advantage is ideal for clients who want to
improve their lifestyle with additional income
• Below is an illustration of how Income Advantage works for the same $500,000 home and the same total
mortgage amount of $195,000 (initial advance of $15,000 and planned advances of $1,000 / month for 15 years)
• Interest builds up more slowly because the principal is advanced over time rather than all up front
Home Equity ($484,000)
Interest ($99,000)
Initial Advance + Planned Advances ($195,000)
Home price appreciation assumed to be 3% annually
Initial advance interest rate: 4.99%
Planned advance interest rate: 4.45%
Home Equity ($485,000)
For illustration purposes only. External factors not accounted for in the calculations may affect future projections. This information is not intended as specific financial, accounting, legal, or tax advice.
10. 10© 2015 HomEquity Bank. All rights reserved.
An Example of How Someone Qualifies – CHIP
$500,000
house (with
an appraisal)
Detached home
in a major Canadian
city
Client qualifies for $195,000
- a loan to value (LTV) of 39% ($195,000 / $500,000)
Client decides, of the $195,000, how much
do they want now (initial advance)
or later (subsequent advances)
Age of the client(s) and home value are the main
drivers of the qualifying amount.
Marital status and gender also contribute
to the quote amount.
The minimum property value we will lend on is
$100,000
The location and type of home matters – apartment,
detached, urban, rural, etc.
The maximum loan to value for a CHIP reverse mortgage
is 55%
For CHIP, the minimum initial advance is $25,000. The
maximum is the total qualifying amount.
Couple
Age
72
Age
68
11. 11© 2015 HomEquity Bank. All rights reserved.
Summary
Recap
For More Information…
• With HomEquity Bank reverse mortgages, clients can confidently
expect to have equity left in their homes when they vacate the
home
• Flexible options to receive proceeds can appeal to different types
of client
• No mortgage payments are required and the proceeds are tax-free
1. Speak to your Business Development Manager (BDM). To find
your BDM, go to www.chipadvisor.ca/bdm.
2. Visit www.chipadvisor.ca
3. Attend our future planned webinars (we’ll let you know when
they’re available for sign-up):
• Grow Your Business with Canada's Fastest Growing Demographic
• Your Grandma's on Facebook: Digital Trends and the Senior Market
• Thinking Outside the Box: Creative Ways to Use Reverse Mortgages
13. 13© 2015 HomEquity Bank. All rights reserved.
To Find Out How Much Your Client Could Qualify For
https://www.chipadvisor.ca/calculator/
14. 14© 2015 HomEquity Bank. All rights reserved.
Rates & Fees (as of May 15, 2017)
For current rate information, please visit https://www.chipadvisor.ca/rates/
