The Canadian home income plan (CHIP) is a plan that enables senior home owners to borrow against equity that have they built up earlier in their homes, and this is the reason why it is called reverse mortgage, through this program a lump sum can be earned by the senior home owners at a percentage of what they had invested in their homes, the mortgage has been registered as a loan against the property and it earns interest of about 1.5% which is above the regular rate for five year mortgage.
The services of CHIP are offered through their offices that are located across the country in the main urban centers.
In this program the government is not involved since it is private company.
Local banks more so are often involved which serve mainly as a referral service and also do some paperwork. The senior home owners can access between 10% and 40% of the home equity and this also it increases with age, the allocation depends on the age and sex, this earning are only given as one time lump sum in that the Canadian Home Income Plan do not offer annuities.
The greatest advantage about the reverse mortgage is that they are tax free income.
Other income benefits will not be affected this is according to revenue Canada whereby reverse mortgage payments are not taxed, and the fact that the amount that you owe cannot exceed the value of the property in any case. More so the loan can be repaid at any time you want to repay. The loan and the interest should be paid when the homeowner dies or when the house is sold, when a spouse dies the survivor can continue with the payments until his/her death or when the house is sold. The reverse mortgage is treated as a loan which is registered as a lien against the property which is the home.
Try the services at The Seniors Lending Centre of Vancouver