Downsizing:
- 70 year old clients sell $700,000 home in Surrey, and clear $325,000 after paying off mortgage, debts, and fees.
- They wanted to free up cash flow, so moved to Abbotsford where they were hoping to buy something for $300,000.
- After looking at many places, they discovered they were going to need to spend about $500k to get what they really wanted, but having no mortgage payment was very important to them, plus they only had OAS and CPP for income and couldn’t qualify for a $200k mortgage
- Their broker and realtor knew about reverse mortgages, and suggested this as a way for them to buy the $500,000 home. They were approved for $195,000
- They put down $305,000, had enough to cover closing costs, and still had some left over. They were able to buy their final home, exactly as they wanted, and they have zero mortgage payment to make for as long as 1 of them lives there.
Upgrading:
- 68 year old couple retires and decides to sell the country home on 5 acres as they have finally decided to buy their dream home!
- They sell in south Langley for $900,000, and find a home they would love to buy for $1.3m
- Given they are retired and earn about $70,000/yr, they simply don’t qualify for an upgrade of $400,000, so their broker and realtor suggest CHIP
- They are approved for $457,000 on the $1.3m purchase price, meaning they need to put down $843,000 from their sale.
- They now live in their dream home, have ZERO mortgage payment to make, and can live comfortably on their $70k/yr. Plus, they are deferring their property taxes to free up even more cash flow!
Buy a Family Cottage:
- 74 year old clients own their Vancouver home worth $2,000,000, free and clear
- They live comfortably, but have most of their net worth tied up in their house and registered investments
- They have 3 children and 8 grand children, and are both still healthy and active
- They would love to buy a family vacation property for the whole family to get together at and build memories, but the Shuswap area is getting expensive, and they just can’t afford a place that big.
- Their realtor and broker tell them about how much reverse mortgages have improved, and to consider as an option
- They find out they are approved for $824,000 on their Vancouver home, and were shocked to find out they actually qualified, and didn’t have to make ANY mortgage payments against it!
- They found the perfect place that could sleep the whole family, and it was $650,000. They bought it with the proceeds from the reverse mortgage, and still have $174,000 of unused, available credit should they need it for anything else.
Assist Children with Home Purchase:
- Dad is 69 and has a house worth $500,000, but lives comfortably and has good monthly cash flow.
- The house will be left to his 2 boys when he eventually passes away, but both of them are struggling financially today, and finding it tough to get into this expensive Lower Mainland housing market
- Dad finds out he can be approved for $212,000 with a reverse mortgage, and help his children today while he’s alive and able to experience the joy of giving.
- He gives $106,000 each to his 2 boys, giving them the down payment they need to afford a new family home.
- Dad’s cash flow isn’t affected at all, and the appreciation in his house over time will likely offset the accruing interest on the reverse mortgage. The children got money TODAY when they really needed it, and there should still be plenty left for inheritance in the end.