Tapping into Your Home’s Equity with the CHIP Reverse Mortgage.

General Leanne Mollica 27 Mar

Curious about the CHIP Reverse Mortgage by HomeEquity Bank? If you’re a Canadian aged 55 or older, this financial solution could hold the key to tapping into your largest asset, your home. It’s a unique opportunity that allows you to use your home equity for various purposes, from paying off debts to funding home renovations or supporting your loved ones financially. But what exactly is the CHIP Reverse Mortgage, and how does it work? Let’s dive into the details.

What is the CHIP Reverse Mortgage?

Maybe you’ve wondered, “What is the CHIP Reverse Mortgage?” The CHIP Reverse Mortgage is a loan secured against the value of your home and is only available for Canadians 55+. It allows you to unlock up to 55%1 of the value of your home without having to sell or move. The money you receive is tax-free, and you can use it towards any of your personal needs, such as:

  • Pay off debts/Consolidate debt
  • Home renovations and repairs
  • Unexpected expenses (medical, emergency)
  • Financially aid your children/grandchildren
  • Improve or maintain your standard of living
  • Pay for a vacation or a special purchase

To be eligible for the CHIP Reverse Mortgage, you must meet the following criteria:

  • Canadian Homeowner: You need to be a homeowner in Canada to consider this financial solution.
  • Age Requirement: Both you and your spouse must be at least 55 years of age.
  • Primary Residence: The property in question should serve as your primary residence.
  • Home Maintenance: You must maintain the property well, pay your property taxes and insurance, and ensure it is not in default.
  • Property Type: Property must be a single family dwelling, detached duplex, triplex, quadruplex, link home, semi detached, townhouse / row house, condo – townhouse/ stacked townhouse, or condo – apartment style

If you meet these criteria, you can unlock tax-free cash with the CHIP Reverse Mortgage in an initial lump sum or scheduled monthly advances when needed.

Why Tap into Home Equity with The CHIP Reverse Mortgage 

  1. Keep your home and maintain ownership of your property: Frequently, people think the bank takes ownership of their home when they get a reverse mortgage. This is not true. HomeEquity Bank lends you a tax-free cash amount based on your home’s value, but you retain ownership of the property. However, you’re responsible for paying property taxes and maintaining the home’s condition.
  2. No regular monthly payments required: A key perk of the CHIP Reverse Mortgage is that there are no monthly payments. When you eventually move, sell, or pass away, the reverse mortgage, including interest and principal, is repaid from the proceeds of the home’s sale.
  3. Choose how you plan to spend the money: One of the most significant benefits of the CHIP Reverse Mortgage is that you completely control the loan and can spend it on whatever needs you require.
  4. The money borrowed is tax-free and does not affect your government benefits: Because you are unlocking home equity, the funds received from the CHIP Reverse Mortgage are not added to your taxable income and do not affect government benefits such as Old Age Security (OAS).
  5. You will never owe more than the value of your home: The CHIP Reverse Mortgage has a No Negative Equity Guarantee2, which means that if you meet your property taxes and mortgage obligations, HomeEquity Bank guarantees that the amount owed on the due date will not exceed the fair market value of your home. If the house depreciates and the mortgage amount owing is more than the gross proceeds from the sale of the property, HomeEquity Bank covers the difference between the sale price and the loan amount.

The CHIP Reverse Mortgage offers Canadians aged 55 and better a flexible and secure way to access their home equity without selling or moving. With no monthly payments required and the ability to use the funds for various purposes, it provides financial freedom and peace of mind. If you’re considering unlocking the value of your home, contact your Dominion Lending Centres mortgage expert to learn more about the CHIP Reverse Mortgage solution.

1Some conditions apply.

2As long as you keep your property in good maintenance, pay your property taxes and property insurance and your property is not in default. The guarantee excludes administrative expenses and interest that has accumulated after the due date

Published By HomeEquity Bank

Great News On The Canadian Inflation Front.

General Leanne Mollica 22 Mar

The Consumer Price Index (CPI) rose 2.8% year-over-year in February, down from the 2.9% January pace and much slower than the 3.1% expected rate. Gasoline prices rose in Canada for the first time in five months, which led many analysts to forecast a rise in February inflation as seen in the US. However, offsetting the increase in gas prices was a deceleration in the cost of cellular services, food purchased from stores, and Internet access services.

Excluding gasoline, the headline CPI slowed to a 2.9% year-over-year increase in February, down from 3.2% in January. Prices for rent and the mortgage interest cost index continued to apply upward pressure on the headline CPI.

On a monthly basis, the CPI rose 0.3% in February, the same as in January. The most significant contributors to the monthly increase were higher travel tours and gasoline prices.

On a seasonally adjusted monthly basis, the CPI rose 0.1% in February.

Prices for food purchased from stores continued to ease year over year in February (+2.4%) compared with January (+3.4%). Slower price growth was broad-based, with prices for fresh fruit (-2.6%), processed meat (-0.6%), and fish (-1.3%) declining. Other food preparations (+1.4%), preserved fruit and fruit preparations (+4.0%), cereal products (+1.7%), and dairy products (+0.6%) decelerated in February.

February was the first month since October 2021 that grocery prices increased slower than headline inflation. The slower price growth is partially attributable to a base-year effect, as food purchased from stores rose 0.7% month over month in February 2023 due to supply constraints amid unfavourable weather in growing regions and higher input costs.

While grocery price growth has been slowing, prices continue to increase and remain elevated. From February 2021 to February 2024, prices for food purchased from stores increased by 21.6%.

The Bank of Canada’s preferred core inflation measures, the trim and median core rates, exclude the more volatile price movements to assess the level of underlying inflation. The CPI trim slowed two ticks to 3.2% in February, and the median also declined two ticks to 3.1% from year-ago levels, as shown in the chart below.

Bottom Line

The next meeting of the Bank of Canada Governing Council is on April 10. Before then, we will see two more important data releases:

1)The Bank of Canada Business Outlook Survey and Canadian Survey of Consumer Expectation and;

2) The Labour Force Survey for March.

Neither of these reports will likely derail the central bank’s move to cut interest rates by the June 10 meeting. Indeed, they could begin to cut rates at the April meeting. This would no doubt trigger a whopping Spring housing market, which is likely to be strong. There is significant pent-up demand for housing, and the prospect of home price increases could well move buyers off the sidelines if a surge in new listings comes to fruition.

The Canadian economy is particularly interest rate sensitive because of the vast volumes of mortgages that will be renewed in the next two years. Mortgage delinquency rates are already rising, so a gradual decline in interest rates is welcome news.

As the chart below shows, the three-month rolling average growth rates for the CPI trim and median core measures averaged 2.2% in February–their lowest reading in three years.

According to the Royal Bank economists, “Building on the January CPI report that was already showing broad-based easing in price pressures in Canada, the February report today reaffirmed those trends. Different measures of core inflation decelerated, and the diffusion index that measures the scope of inflation pressures also improved. That measure, however, was still showing slightly broader price pressures than pre-pandemic “norms”, suggesting there’s still room for more improvement.”

With the economy’s slow growth trajectory, the central bank has every reason to begin cutting interest rates soon.

Please Note: The source of this article is from SherryCooper.com/category/articles/

Tips to Improve Your Credit Score.

General Leanne Mollica 19 Mar

One of the important factors in home ownership is understanding things like your credit score.  Some people don’t pay much attention to this metric until they begin the mortgage discussion! However, you will find that your credit score is one of the most important factors when it comes to qualifying for a mortgage at the best rate – and with the most purchasing power.

Credit scores range from 300 to 900, the higher your credit score the better. Ideally, you should be aiming for a credit score of 680 for at least one borrower (or guarantor), especially if you are putting under 20% down. If you are able to make a larger down payment of 20% or more, then a score of 680 is not required.

This score is based on spending habits and behaviours including:

  • Previous payment history and track record of paying your credit accounts on time is the number one thing that your credit score considers.
  • Your current level of debt and whether you’re maxed or not is the second most important factor.
  • How long you have had your credit in good standing is the third most important factor.
  • Attaining new credits is the fourth factor and can be a red flag if you’re opening several credit cards, accounts, or loans in a short period.
  • Your credit mix is the final aspect of your credit score to determine whether you have a healthy mix of credit cards, loans, lines of credit, etc.

If you want to improve your credit score, you can! It is a gradual process, but it is well worth it. Here are some tips to help you get started!

  1. Pay Your Bills: This seems pretty straightforward, but it is not that simple. You not only have to pay the bills, but you have to do so in full AND on time whenever possible.  Paying bills on time is one of the key behaviors lenders and creditors look for when deciding to grant you a loan or mortgage. If you are unable to afford the full amount, a good tip is to at least pay the minimum required as shown on your monthly statement to prevent any flags on your account.
  2. Pay Your Debts: Whether you have credit card debt, a car loan, a line of credit, or a mortgage, the goal should be to pay your debt off as quickly as possible. To make the most impact, start by paying the lowest debt items first and then work towards the larger amounts. By removing the low-debt items, you also remove the interest payments on those loans which frees up money that can be put towards paying off larger items.
  3. Stay Within Your Limit: This is key when it comes to managing debt and maintaining a good credit score. Using all or most of your available credit is not advised. Your goal should be to use 30% or less of your available credit. For instance, if you have a limit of $1000 on your credit card, you should never go over $700. NOTE: If you find you need more credit, it is better to increase the limit versus utilizing more than 70% of what is available each month.

  4. Credit and Loan Application Management: Reduce the number of credit card or loan applications you submit. When you submit too many credit card applications, your credit score will go down, and multiple applications in a short period can do more damage. Your best to apply for one or two cards and wait to see if you are accepted before attempting further applications.

If you have questions about your credit score, don’t hesitate to reach out to a DLC Mortgage Expert today! Whether you simply want to check your score or find out how you can improve it, our door is always open.

DLC Marketing Team

Turning Your Homeownership Dreams Into Reality, @mymortgagestrategy

Canadian Employment Gains Strong in February–Up 41,000.

General Leanne Mollica 11 Mar

february job gains double forecast as unemployment rate ticks up

Today’s StatsCanada Labour Force Survey for February was a mixed bag and shows the dramatic effect of surging immigration. Canadian employment rose by a much stronger-than-expected 41,000, dominated by a 71,000 rise in full-time jobs.

The employment rate–the proportion of the population aged 15 and older who are employed–fell a tick to 61.5%. This is the fifth consecutive monthly decline, the most extended period of consecutive decreases since the six months ending in April 2009 during the global financial crisis. The Bank of Canada has emphasized the importance of the employment rate in recent commentary.

The employment rate in February 2024 was down 0.9 percentage points from the recent peak of 62.4% observed in February 2023. This downward trend is associated with the unprecedented ballooning of the working-age population.

The unemployment rate increased 0.1 percentage points to 5.8% in February, offsetting the decline in January. The unemployment rate has held relatively steady in recent months, at 5.8% for three of the past four months. This follows an upward trend from April 2023 to November 2023, when the rate increased from 5.1% to 5.8%. The labour force participation rate—the proportion of the population aged 15 and older who were employed or looking for work—held steady at 65.3% in February.

The labour force jumped 76,000 last month and is up more than 550,000 in the past year, while the adult population has surged by more than 1 million people (+3.2%), compared with a job increase of 368,000. Even very strong job growth is not keeping up with the torrid influx of new workers, dampening wage inflation.

Most of the new jobs were in the service sector, led by employment in accommodation and food services following a decline in the prior month. Also rebounding was employment in professional, scientific, and technical services. On a year-over-year basis, employment in this industry was up 85,000 (+4.6%), the second-largest year-over-year increase among industries, after transportation and warehousing (+104,000; +10.6%).

In February, average hourly wages were up 5.0% year-over-year, following an increase of 5.3% in January. This is still above the Bank of Canada’s comfort zone, although policymakers suggested that wage inflation appeared to have peaked in this week’s policy statement.

Bottom Line

We will see one more Labour Force Survey on April 5th before the Bank of Canada meets again on April 10th. The all-important CPI inflation data will be released on March 19th.

Today’s report, while strong, suggests that the surge in the working-age population and the decline in job vacancies could continue to temper wage inflation. The Bank of Canada will need more proof before it releases the brakes and lowers interest rates.

Please Note: The source of this article is from SherryCooper.com/category/articles/

Turning Your Homeownership Dreams Into Reality, @mymortgagestrategy

 

Fraud Awareness Month

General Leanne Mollica 4 Mar

Did you know? March is Fraud Awareness Month. Protecting yourself and your mortgage from fraud is crucial to safeguard you financial well-bring. Understanding some of the more common mortgage fraud scams and how to protect yourself can make all the difference.

The most common type of mortgage fraud involves a criminal obtaining a property, and then increasing its value through a series of sales and resales involving the fraudster and someone working in cooperation with them. A mortgage is then secured for the property based on the inflated price.

Below are some red flags to be aware of as potential lead-ins to fraud;

  • If someone offers you money to use your name and credit information to obtain a mortgage.
  • If you are encouraged to include false information on a mortgage application
  • If you are asked to leave signature lines or other important areas of you mortgage application blank
  • If the seller of investment advisor discourages you from seeing or inspecting the property when purchasing
  • If the seller or developer rebates money on closing, and you don’t disclose this to your lending institution

Another fraud scheme to be aware of is title fraud. Title fraud is essentially a form of identity theft and is typically discovered when your mortgage mysteriously goes into default and the lender begins foreclosure proceedings.

With title fraud and individual, who is using false identification to pose as you, will register forged documents transferring your property to his/her name. From there, they register a forged discharge of you existing mortgage and get a new mortgage against your property. Then the fraudster makes off with the new home loan money without making mortgage payments. The bank thinks you are the one defaulting – and your economic downfall begins.

But don’t panic! There are lots of ways you can protect yourself from title fraud:

  • Always view the property you are purchasing in person
  • Check listings in the community where the property is located – compare features, size, and location to establish if the asking price seems reasonable
  • Make sure your representative is a licensed real estate agent
  • Beware of realtors or mortgage professionals with a financial interest in the transaction
  • Ask for a copy of the land title or go to a registry office and request a historical title search
  • In the offer to purchase, include the option to have the property appraised by designated or accredited appraiser
  • Insist on a home inspection to guard against buying a home that has been cosmetically renovated or formerly used as a grow house or meth lab
  • Ask to see receipts for recent renovations
  • When yo make a deposit, make sure your money is protected by being held “in trust”
  • Consider the purchase of title insurance. While title insurance can be purchased after taking possession or years later, the best time to purchase a title insurance policy is NOW before an issue like fraud is discovered.

Remember, being proactive and vigilant is key to protecting yourself and your mortgage from fraud. If you suspect fraudulent activity, act promptly to mitigate potential damage and report it to the appropriate authorities.

DLC Marketing Team

Turning Your Homeownership Dreams Into Reality, @mymortgagestrategy