CHIP- Canadian Home Income Plan is the name of the company providing reverse mortgages in Canada.

A reverse mortgage allows homeowners to convert Equity in their homes into cash without selling the property or having to make Regular Payments (monthly, weekly, bi-weekly, etc).

To qualify, homeowners must be at least 62 years of age and have significant Equity in their respective property.  The amount that can be borrowed depends on the homeowner's age.  Reverse mortgages are for between 10% and 40% of the Appraised Value of the home.  The older the Homeowners, the more they can borrow.

The homeowner retains ownership and possession of the home.  The lending company registers a reverse mortgage against the property.  At death, or when the house is sold, the loan and the accrued interest must be repaid.

It is possible that when the house is sold, a high percentage of the proceeds from the sale may be required to pay off a loan.

If the homeowner dies, the estate will have to pay off the loan and the accrued interest.  This may greatly eat into the inheritance for the homeowner's heirs.

To find out more about Reverse Mortgages and the Canadian Home Income Plan please Click Here.

If you are interested in calculatimg how a Reverse Mortgage may work for you, go to the Reverse Mortgage Calculator by Clicking Here.

An alternative is to establish an equity credit line. This allows you to take funds only as you need them, thereby owing the least interest possible with no surprises.  It would be prudent if you are considering this to consult a financial advisor.   

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