With the holiday season fast approaching aging Canadians embrace the concept of ‘giving with warm hands’. Almost 5% of clients aged 55 and over arrange reverse mortgages as a way to gift money to their adult children.
There’s a lack of information around reverse mortgages, and as more seniors look to this type of financing to help their adult children as well as finance their retirement – it’s time to set the record straight on some misconceptions.
With the number of grey divorces on the rise in Canada, many Boomers may not realize the cost of maintaining two homes can increase expenses by as much as $20-$30,000 per year. This can have a serious impact on finances during retirement. In fact, according to Statistics Canada 2011 census data, divorce among Baby Boomers is becoming more common and the numbers are expected to steadily increase. Approximately 60,000 Canadian couples divorced in 2013 and 25% of these divorces were ‘grey’, occurring among couples aged 55 and older.
When it comes to retirement, many Canadians look to downsizing to a smaller home or condo to supplement income for their latter years.
What many fail to realize, however, is the average cost of downsizing is approximately $40,000. That’s according to mortgage agent John Cavan, a 26-year industry expert with Mortgage Architects. The cost is an industry average based on the sale of a $400,000 home and includes real estate, legal and moving fees as well as land transfer taxes.
Although retirement is meant to be a time to enjoy friends and family it’s finances that typically derail what can be a special time – especially for women seniors.
That’s because this segment of Canada’s population was raised in a time when most men were expected to control the finances, explains Trevor Van Nest, Owner and Founder of York Region Money Coaches.
A new study commissioned by HomEquity Bank, provider of the CHIP reverse mortgage, shows 45% of Canadians surveyed are not expecting an inheritance from their parents, compared to 35% who do expect to receive a financial bequest. Twenty per cent of respondents don’t know if they will receive an inheritance.
The lack of pension reform combined with seniors living longer than ever is leading to a lack of finances in old age – a troubling issue that needs to be discussed in families across the country.
HomeEquity Bank, announced the launch of its newest and most innovative product offering for senior homeowners, HomeEquity Bank Income Advantage. Income Advantage is offered from coast-to-coast directly from HomeEquity Bank.
HOMEQ Corporation (“HOMEQ”) (TSX: HEQ) announced today the closing of the previously announced arrangement under the Business Corporations Act (Ontario) (the “Arrangement”) involving HOMEQ and Monaco Acquisition Inc., an entity controlled by Birch Hill Equity Partners (“Birch Hill”). Under the Arrangement, Birch Hill has indirectly acquired all of the outstanding common shares of HOMEQ for cash at a price of $9.50 per common share.
HomEquity Bank, a subsidiary of HOMEQ Corporation, announced today that it is being recognized as one of this year’s Best Workplaces in Canada. The list of leading Canadian employers will appear in a special national report on Thursday April 19th, 2012.
