Living independently with peace of mind can be the ultimate goal as people age beyond youth. But with age comes the unasked health issues piling up more bills to the already existing bills and other expenses that push people to insufficient financial living. This makes life tougher and pushes people into anxiety and stress.
As a solution for all this for the people of US and Canada reverse mortgage loan system stands up as a savior.
Why To Opt For A CHIP?
CHIP Canadian home income plan, also known as the Reverse mortgage is a loan type which can easily be availed with minimum formalities than compared to the other normal loans if you are eligible to obtain it.
The greatest benefit of a Canadian home income plan is that you need not have to make any monthly payments or any kind of payments at regular intervals as an interest for the loan. Instead, the interest amount will be added to the amount that has to be repaid to claim your home for yourself again.
How Does It Work?
You must be at least 55 years of age to be eligible for the Canadian home income plan, and if the title of the home has your spouse’s name in it, then your spouse must also be 55 years of age. Both of you must be eligible to avail of the loan. Then you will be asked to go for an independent legal advice session.
The session will be about the loan that you are about to obtain; all legalities will be explained to you during this session. You will be asked by your reverse mortgage lender to produce evidence or proof that you have attended this independent legal advice session before approving the loan.
Benefits In CHIP:
- The monthly headache of making payments for your loan will be avoided. Since your loan’s interest will be added to the amount borrowed, paying off any installments at regular intervals will not be necessary. If you wish to make little payments monthly, you can opt for that option and make little payments monthly.
- The loan can be available quickly if you are eligible compared to other loans like personal loans, credit cards, etc.
- To qualify for other loans, you will need to submit an income statement or credit score. But in the Canadian home income plan, you do not need such formalities to avail of the loan.
- There will be no taxes levied on the sum borrowed. Though you turn half the value of your home into cash, this will be considered a loan. So there is no need for you to pay any taxes for the sum that you have turned in to cash.
- From the money obtained through CHIP, you can pay off any debits that you have borrowed from a source where you were asked to pay monthly payments for the loan.