We don’t have to look very far to see - or to hear - stories about how many retirees and pre-retirees are looking for alternatives to replace some lost retirement income.
In the US - the new economic stimulus bill signed into law recently by President Obama raises the loan limits for reverse mortgages, which will expand the amount of home equity that seniors can either turn into retirement income or use to offset investment losses.
The number of 60-yearolds in Canada will double in the next 25 years. Will this increase in demand by seniors carry over to changes in the reverse mortgage rules here in Canada?
A reverse mortgage is simply an advance on the value of your home that accumulates interest. The accumulated debt does not need to be paid off until you die, sell the home or move out of the house. If you qualify, and are over age 62, you can get up to 40% of the value of your home and you can do whatever you want with the money. So a $500,000 home qualifies for at most a $200,000 loan.
The average CHIP client is 73 and stays in his or her home 10 to 12 years.
http://www.canada.com/nationalpost/columnists/story.html?id=51521fbf-2e25-436a-ad47-fe3dc593b67e
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