Many Canadians consider downsizing during their retirement years. Once their children have left the nest, the choice seems obvious: relocate to a smaller residence or a more affordable town and capitalize on the price difference. For many retirees, the funds from the sale of their home can significantly impact their overall lifestyle and financial well-being.

However, there are downsides of downsizing you should be aware of before you call your realtor.

Downsizing in Canada: A Cost Analysis

The cost of moving is probably one of the biggest downsides to downsizing. To give you an idea of the figures involved, we conducted a cost analysis for a typical downsizing scenario using an example of selling a home in Toronto for $1,000,000 and buying a condo for $700,000.

Theoretically, this would free up $300,000 in equity while moving you into a smaller home. According to Ratehub, you need a nest egg of $450,000 if you want to retire comfortably in Canada. The money from the sale of your home could have a meaningful impact on your retirement finances. But how much of that chunk will you get to keep to boost your nest egg? Below is an estimated list of cost considerations when choosing to downsize:

As you can see, downsizing could cost you between $72,175 – $94,875.

If you live in a big city like Toronto, $300,000 of equity could shrink to just $205,125* after considering these downsizing costs. However, these costs are not the only negative effects of downsizing to consider.

The Downsizing Dilemma 

Many Canadians underestimate the financial and emotional costs of downsizing, overlooking various aspects:

• Home Improvements: Before selling, homes often need upgrades, from simple fixes to major renovations like kitchens or roofs. Also, many invest in staging their homes.
• Belonging Decisions: Downsizing means deciding which possessions to keep due to space constraints, often leading to emotional challenges and storage expenses.
• Leaving Family Homes: Leaving a home that carries so many joyful memories, especially if someone is widowed, can be challenging. Relocating might disconnect you from communities and loved ones.

An Alternative to Downsizing in Canada: The CHIP Reverse Mortgage 

The CHIP Reverse Mortgage by HomeEquity Bank can be the ideal alternative to downsizing. Unlock up to 55% of your home’s equity in tax-free cash while staying in your beloved home without leaving the neighbourhood you love. This money improves your retirement finances and can be used to renovate and retrofit the home for accessibility and livability as you age. With no required monthly mortgage payments to make, the CHIP Reverse Mortgage is becoming a popular solution.

Contact me to learn how the CHIP Reverse Mortgage can help you save on the stress and expense of downsizing and live the retirement of your dreams.

*Based on $300,000 of equity minus $94,875 (the highest downsizing cost).

Published by DLC Marketing Team

Is the CHIP Reverse Mortgage right for you?

As a Canadian 55+, there are a variety of financial options available for you in retirement. However, this does not mean that every financial option is right for you, so it’s essential that you reflect on your retirement needs and choose a financial solution that best meets those needs. For example, the CHIP Reverse Mortgage by HomeEquity Bank is a versatile financial option that can help solve several financial challenges faced by Canadians 55+.

If you are retiring with debt and want to consolidate and avoid payments, if your investment portfolio has not performed as well as you had planned, or if you require additional cash flow to deal with rising expenses because of inflation, then the CHIP Reverse Mortgage may be the right financial solution for you. From helping you pay bills and cover unplanned expenses to having the freedom to travel more or purchase a second home or vacation property, the CHIP Reverse Mortgage is a versatile and flexible financial solution for retired Canadians at least 55 years old.

We have found that Individuals who use the CHIP Reverse Mortgage usually fall within four groups based on their financial needs:

1. Alleviate the stress of debt.

You fall within this group if you need help making mortgage payments and paying your credit card bill. If you prefer not to use your savings or investment portfolio for cash and are incurring more and more debt over time due to unavoidable expenses, then you likely require a solution to ease your financial stress.

2. Pay for unplanned expenses.

If you are facing unexpected expenses, such as fixing a broken window, retrofitting your home for mobility reasons, or even incurring costs associated with in-home care, you fall into this group. Essentially, you are facing a short-term financial strain and need quick cash to take care of the costs.

3. Want to live life to the fullest.

You fall into this group if you want to take advantage of your free time now that you have retired but need more funds. It would help if you had increased cash flow to live out the retirement you have always dreamed of.

4. Maintain a standard of living.

Many individuals may be forced to adjust their lifestyle once they retire to accommodate a lack of income. If you want to maintain your preretirement lifestyle but require extra funds, you fall into this group.

If you belong to any of these groups, it may be time to consider the CHIP Reverse Mortgage as your financial solution. The CHIP Reverse Mortgage allows Canadian homeowners 55+, such as yourself, to access up to 55% of their home’s value in tax-free cash. It offers flexible withdrawal options, including a lump sum, in stages, at regular intervals over a set period, or a combination. Furthermore, you are not required to make monthly mortgage payments and continue owning your home. You are only required to repay the loan when you decide to move out, sell, or no longer reside in your home. HomeEquity Bank also offers a “No Negative Equity Guarantee”[1], which means you will never owe more than the value of your home as long as you keep the property in good maintenance, pay property taxes and insurance, and the property is not in default.

Contact me to see if the CHIP Reverse Mortgage is a fit for you and how to use it to help you in retirement.

[1]The guarantee excludes administrative expenses and interest that has accumulated after the due date.

Written by the good people at HomeEquity Bank

Every Canadian deserves to live retirement on their terms. Contact me today

to find out how https://youtu.be/xHpyTtRbuUg

As the cost of living has increased, it may be challenging to meet your retirement income needs and access the cashflow you need to live a desired lifestyle. One advantage that many retired Canadians possess is home ownership. Tapping into some of the equity you have built in your home can help you obtain the additional funds you require.

Tap into your home equity 

If you wish to stay in your current home, there are two popular methods to tap into your home equity: a Home Equity Line of Credit (HELOC) and a reverse mortgage.

HELOC: lenders typically allow homeowners to access up to 65% of their home’s value. With a HELOC, you can borrow money as needed, based on an agreed-upon amount, and you’ll be required to make minimum monthly interest payments. Unlike a conventional mortgage, there are no fixed scheduled payments towards the loan’s principal, offering you the flexibility to repay the loan at your convenience.

Reverse Mortgage: is another common way homeowners tap into their home equity. Specifically, the CHIP Reverse Mortgage by HomeEquity Bank is designed for Canadian homeowners aged 55 and above. It allows you to access up to 55% of your home’s value and receive the funds as tax-free cash, all without the need to move or sell your property. While you continue to live in your home, there are no required monthly mortgage payments to worry about. The full loan amount only becomes due when you decide to move, sell the house, or through the estate after the homeowner’s passing.

Advantages of the CHIP Reverse Mortgage 

The CHIP Reverse Mortgage offers several benefits, one of the most notable being the absence of monthly mortgage payments. This feature is particularly valuable to Canadians 55+ when cashflow can be a concern. Here are some of the other benefits of the CHIP Reverse Mortgage:

• Simplified underwriting. The CHIP Reverse Mortgage caters to Canadians aged 55+ who rely on a fixed income and might face challenges qualifying for a HELOC.
• No need to requalify: Unlike a HELOC that requires continuous credit score checks, the CHIP Reverse Mortgage eliminates the need for requalification, ensuring access to funds without credit score barriers.
• Death of a spouse does not impact a reverse mortgage. With a HELOC, the passing of a spouse may prompt the bank to conduct a credit score review of the surviving spouse. With the CHIP Reverse Mortgage, the loan doesn’t become due until after both homeowners no longer live in the home.
• Fixed-term rate options:  The CHIP Reverse Mortgage provides fixed rate choices, allowing borrowers to lock in rates for up to five years. On the contrary, a HELOC’s interest rate floats and fluctuates with the Bank of Canada’s prime rate, leading to increased borrowing costs in times of rising interest rates.

Contact me to learn more about how you can use the CHIP Reverse Mortgage to tap into your home equity.

Written by the good people at HomeEquity Bank

What is the First Time Homebuyer Incentive?

The first-time homebuyer incentive program is a shared-equity mortgage with the Canadian government that helps qualified first-time buyers reduce their monthly mortgage payments to better afford a home!

The Incentive: This program allows you to obtain an incentive from the government to assist with your down payment, thereby lowering your overall mortgage amount and, in turn, your monthly mortgage costs.

• 5% or 10% for a first-time buyer’s purchase of a newly constructed home
• 5% for a first-time buyer’s purchase of a resale (existing) home
• 5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home

Qualifying for the Incentive: This program is designed to assist first-time homebuyers, therefore you must:

• Have never purchased a home before
• Have not occupied a home that you, your current spouse or common-law partner owned in the last 4 years
• Have recently experienced a breakdown of marriage or common-law partnership

If you meet the above criteria, further qualifications are based on your income and status as follows:

• Your total qualifying income is no more than $120,000 ($150,000 for homes in Toronto, Vancouver, or Victoria)
• Your total borrowing is less than four times your qualifying income (four and a half times your income if you’re purchasing in Toronto, Vancouver or Victoria)
• You are a Canadian citizen, permanent resident or non-permanent resident authorized to work in Canada
• You meet the minimum down payment requirements

Here’s an example.

Cali wants to buy a new home for $400,000.
Under the First-Time Home Buyer Incentive, Cali can apply to receive $40,000 in a shared equity mortgage (10% of the cost of a new home) from the Government of Canada. This lowers the amount she needs to borrow and reduces her monthly expenses.
As a result, Cali’s mortgage is $228 less a month or $2,736 a year.

Additional Costs: With the incentive, there are a few additional costs to be aware of such as additional legal fees (your lawyer is closing two mortgages, the one on your behalf and that on the Government’s behalf), appraisal fees to determine the repayment value of your home when it comes due, plus other potential fees such as refinancing or switching costs if you decide to move or update your mortgage.

Repayment Process: When it comes to repayment of the incentive, the homebuyer is required to pay back after 25 years or when the property is sold, whichever comes first. They are also able to repay anytime prior to this without penalty. The repayment is based on fair market value at the time of repayment and you would pay back what you received. For instance, if you received a 5% incentive, you would repay 5% of the current home value at the time of repayment.

Keep in mind, if you choose to port your mortgage or go through a separation during the term and want to buy out your co-borrower, you will have to repay the incentive sooner.

Updates to the First-Time Home Buyer Incentive can benefit more homeowners

The Government of Canada will limit its share in the appreciation of a home! Now, homeowners will pay back up to a maximum gain of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment.

This means that participants may be able to keep more when their homes increase in value

The Government of Canada will also limit its share in the depreciation of a home at the time of repayment. This is up to a maximum loss of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment.

In the case of appreciation, the above Incentive repayment calculation is retroactive to the implementation date of the First-Time Home Buyer Incentive (September 2, 2019). In the case of depreciation, the above Incentive repayment calculation applies to all borrowers who have signed a shared equity mortgage agreement on or after June 1, 2022.

Already repaid the First-Time Home Buyer Incentive?

CMHC has contracted FNF Canada to administer reimbursements to eligible borrowers. If you are eligible, you will be contacted by FNF Canada and asked to verify your information in order to proceed with your reimbursement.

Fall in Love with Your Home… All Over Again.

Most of us like where we live, but we might not love it. Have you fallen out of love with your home? No sweat! We have the tips to help you fall in love with your home, all over again!

Cleanse and Purge

Depending how long you have lived in your home, you have probably gathered up a number of items that you no longer need, want or use. One of the first steps to falling in love with your home again is purging your space of all that unnecessary stuff – whether it is old clothes, furniture you hate, outdated accessories – removing the old to make way for the new can have a huge effect on how you feel about your home.

Rearrange Your Rooms

Once you have purged all of the unwanted items around your home, you probably have a bit more space to work with! A great way to breathe new life into your space is by re-arranging your furniture! While not all rooms will have optimal space, you might be surprised if you just try and see how it would look with a different layout! Simply moving around your furniture will make your home feel revived, without any extra spend!

Consider a New Colour

If you’re looking for that little extra refresh, a new coat of paint is a great way to get the job done! Changing the tone of your room from darker to lighter, or warm to cool, can make the space feel brand new again! This year’s tones include purples and pink hues, matched with grey and white or pops of teal and blue for that extra 70s vibe!

Or Try a New Style

If you’ve always had a home with traditional cupboards or furniture, it might be time to mix it up! Swapping out a few old pieces for something new, perhaps with a modern twist, can revive any space. Consider starting small by swapping lamps or your coffee table and moving up to larger items like TV stands and bookshelves for that fulsome redo!

Enhance Your Lighting

Lighting has a big effect on mood, and it is the same for your home. Installing new light fixtures, adding or removing lamps, or even changing your bulbs from a bright white to warm or vice versa for a different environment. If you’re looking for that extra ambiance, try a lava lamp or a cute candle tray!

Retouch and Refinish

If you’re not interested in going all out on your home makeover, you don’t have to! There are still plenty of ways you can fall in love with your home again… such as with a little retouching and reviving! A great place to start is your kitchen cupboards. refinishing and painting your existing cabinets is easier than you may think!

Don’t Forget About the Exterior!

While we spend a lot of our time indoor our home, you don’t want to forget about the exterior! New and inviting front door lighting, a cute brick path and some new flowers can create a whole new world for you to enjoy. Consider also adding wicker furniture, an outdoor rug and hanging fairy lights or adding a water feature for that extra relaxation.

Not sure if you can afford updates to your home? Consider utilizing your home equity!  Contact me any time, I’m more then happy to assist you in making your dreams a reality.

Written by the DLC marketing team

Change of Address Checklist. 

So, you’re moving! Before you hunker down in your new home, there are a few things you will want to  take care of regarding your new address.

Personal Contacts:

First and foremost, if you haven’t yet, make sure to tell all your personal contacts about your address change, including:

• Relatives
• Friends
• Employer
• Schools, colleges, universities, daycares
• Landlord (if necessary)
• Clubs, associations and charities

Healthcare Professionals:

For the purposes of keeping your health care records up to date, make sure to update your professional contacts:

• Doctor(s)
• Dentist
• Veterinarian
• Other healthcare specialist(s)

Creditors and Services:

If you haven’t yet reached out to your services, you will want to do so as soon as possible for a smooth change of service from your existing address to your new address. These services include:

• Phone, cable, internet, mobility company
• Electricity / hydro
• Natural gas
• Heating fuel company (ask if you receive a deposit refund)
• Financial institution
• Credit card companies
• Insurance companies / broker(s)
• Lawyer / notary
• Subscriptions (e.g., newspapers, books, music, loyalty programs)

Government Services:

Lastly, it is vital to inform the federal and your provincial/territorial government of your address changes to ensure all your data and ID cards are updated:

• Driver’s license
• Health Card
• Vehicle registration
• Canada Post / E-post
• Canada Revenue Agency
• Canada Pension Plan / Quebec Pension Plan
• Old Age Security
• Employment Insurance

Need assistance in your search for a new home? I can help make that search easier by getting you pre-approved before you go shopping for that forever home.

Written by the Marketing team at DLC

4 Key Things to Know about a Second Mortgage.

A second mortgage is a mortgage that is taken out against a property that already has a home loan (mortgage) on it. Generally people take out second mortgages to satisfy short-term cash or liquidity requirements, have an investment opportunity or to pay off higher-interest debts (such as credit cards and student loans) that a second mortgage might offer.

If you are considering a second mortgage for any reason, here are a few key points to keep in mind:

Second Mortgages and Home Equity: Your second mortgage and what you can qualify for hinges on the equity that you have built up in your home. Second mortgages allow you to access between 80% and 95% of your home equity, depending on your qualifications.

For example, if you seeking 95% Loan-to-Value loan (“LTV”):

House Value =                                                          $850,000
95% LTV (maximum mortgage amount)            $807,500
less: First Mortgage                                                 ($550,000)
Amount Available Through Second Mortgage    $257,500

Second Mortgages and Interest Rates: When it comes to a second mortgage, these are typically higher risk loans for lenders. As a result, most second mortgages will have a higher interest rate than a typical home loan. There is also the option of working with alternative and private lenders depending on your situation and financial standing.

Second Mortgage Payments: One advantage when it comes to a second mortgage is that they have attractive payment factors. For instance, you can opt for interest-only payments, or you can select to pay the interest plus the principal loan amount. Work with your mortgage broker to discuss options and what would work best for your situation.

Second Mortgage Additional Fees: A second mortgage often comes with additional fees that you should be aware of before going into the transaction. These fees can vary widely but often are a percentage of the mortgage.  Other fees to consider include appraisal fees, legal fees to set up the second mortgage and any lender or broker administration fees (particularly with alternative or private lenders).

Second mortgages are a great option for many homeowners and, in some cases, may be a better solution than a refinance or a Home Equity Loan (HELOC). If you are interested in learning more or want to find out if a second mortgage is right for you, don’t hesitate to reach out to me today.

Written by the DLC Marketing Team

10 Money Saving Tips.

When it comes to saving money, there are a lot of little things you can do that add up to make a big difference! Here are 10 doable money-saving tips:

1. Automatic savings: Are one of the most effective ways to save because you can’t spend what you can’t access! Instruct your employer to transfer a certain amount from your paycheck each pay period into an RRSP or savings account (or both) or set up automatic transfers in your banking account to coincide with your payday. I had my company do this for three years and was able to save up the money towards the down payment on the house.
2. Consolidating debt: Will result in a single monthly payment and lower interest costs! Many people don’t realize just how much money they are wasting on interest each month, especially if you have multiple loans or credit cards. Consolidating debt can help you gain control and maximize spending on the principal amounts to pay off the loans faster. Go thru your statements for one month, then for the year and see just how much is being wasted on service fees and interest charges.
3. Budget with cash: If you have trouble with overspending or find it too easy to use your card. After your bills are paid, take out the remaining cash (spending money) and only use that. Once the cash is gone, you’re out of money until next payday! Having physical cash in hand can also help you think twice when making purchases.  Keep your credit cards off your phone and at home so when you are out, your not tempted to tap that purchase.
4. Buying in bulk: Is a great way to save a bit here, and a bit there, when doing your regular grocery shop or purchasing other items. If you know  you’ll need more, stock up at once for bulk savings, which will help you in the long run! With the prices of groceries at record levels, stock up on items that can be stored easily and without issue of going bad. Keep an eye on your local flyers!!
5. Before Buying:  There are two things you should always do. The first is to wait at least 24 hours, and the second is to shop around! If you still want to buy something the next day, make sure you get the best price available!
6. Plan Your Meals: Most of us don’t have time to make breakfast (let alone lunch!) before we fly out the door for work.  What if I told you that getting up an hour earlier could save you over $100 a week! Even just making your lunch the night before, if your not an early riser,  that’s big savings!  Just think about how much you spend going out for breakfast AND lunch each day? Groceries are a lot cheaper, and you can even prep a few days worth of meals on your day off as part of your prep for the week. Get a thermos for your coffee or tea.  Add that expense up for the month! How much can you save just by doing that.
7. Think in Hours versus Dollars:  Every time you are looking to make a purchase, especially large ones to help you understand the TIME value of money. A new $24 Blu-Ray = 1 hour of work. A brand-new mattress = 41.67 hours of work. Understanding the time that went into earning money for a purchase can help with reconsidering frivolous items, or encourage you to look for the best deal on necessary products.
8. Utility Savings:  Can help you save each month! Don’t blast your A/C with all the doors in your house open, don’t pump the heat without sealing cracks and consider things like installing water-saving toilets and running cold-water wash cycles to save energy (and money!) every day. Turn off lights that don’t need to be on. Change your bulbs to a lower watt.  Run the dishwasher at night when the cost per gallon is less. Flush the toilet only when needed.
9. Master DIY:  While sometimes you can spend $120 to make a $20 item yourself, there are some things that do benefit from DIY, such as installing dimmer switches, that can help save you money in the long run.
10. Save Windfalls and Tax Refunds:  For a rainy day. A good rule of thumb is to put 50% of bonuses, tax refunds or other windfalls into your savings account and put the rest against loans owing. While you might want to go on a shopping spree or plan a vacation, paying off your debt NOW will free you up in the future.

I hope you find these tips useful. I thought they were real common sense habits you can do that don’t hurt too much. If your debt is beyond these quick little fixes and you own your home, with some equity built into it, perhaps a reverse mortgage is something to look at as a solution.

If you would like to brainstorm a strategy on getting your debt under control, or on getting that down payment saved, please feel free to contact me and we can work together to find a solution that works for you.

Written by the DLC Marketing Team

Post-Holiday Debt? Consolidate Today!. 

The holidays are a season of giving and often times, households can often find themselves carrying some extra debt as we enter the New Year.

If you happen to be someone currently struggling with some post-holiday debt, that’s okay! Whether you’ve accumulated multiple points of debt from credit cards or are dealing with other loans (such as car loans, personal loans, etc.), you are likely looking for a way to simplify your payments – and reduce them. Rolling them into your mortgage could be the perfect solution.

Consolidating other forms of debt into your mortgage has multiple benefits. For starters, this process can help you to pay off your loans over a longer period of time with smaller payments per month, and often at a reduced interest rate when compared to a credit card.

By freeing yourself from these high interest rates and gouging interest payments, you will not only have more money each month but have a better chance of taking back your financial control and getting your loans completely paid off!

If you’re still not sure if this is the right solution for you, here is an example… if you have $30,000 of credit card debt, you are probably paying AT LEAST $600 per month and $500 per month of that is likely going directly to interest. If you let me help you to roll that debt into your home equity and monthly mortgage, your payment to this $30,000 portion would drop down around $175 per month, with interest charges closer to $140 per month. That is huge savings!

Not only does debt consolidation into your mortgage help with reducing interest charges and making your loan more manageable, but it is also much easier to keep track of and pay a single monthly installment versus managing a dozen different loans or bills.

While debt consolidation through refinancing will increase your mortgage since you have to add the debt into your existing mortgage amount, the benefits to lowering your overall payments and management can be well worth it when it comes to cost savings, time and stress. Keep in mind, you need at least 20 percent equity in your home to qualify for this adjustment.

If you are looking for a way to simplify (or get out of) debt, you can always reach me via phone call, text, email, all available on my website or scan my QR for access to my toolbox. I would be happy to take a look at your financial portfolio and current mortgage, and help you come up with the best option to suit your needs.

Written by the DLC Marketing team