On September 29th, 2022, HomeEquity Bank held a webinar fireside chat with Chief Financial Commentator, Pattie Lovett-Reid and Executive Vice President of Marketing and Sales, Yvonne Ziomecki-Fisher. In this webinar, Pattie and Yvonne had an insightful conversation about today’s economic climate and the financial tools available to help your clients be financially secure. In case you missed it, here are the top five takeaways from the fireside chat.   1. Current Economic Landscape: A major point of discussion between Pattie and Yvonne in the webinar was about the current economic landscape and how reverse mortgages fit in it. Pattie explained that she looks at four key indicators when studying the economic climate. Interest Rates Inflation Rates Job Losses Growth Today’s economic climate can be described as having high interest rates, high inflation, three consecutive months of job losses, and GDP growth of 0.1% month over month in August. All of these indicators impact people differently. For example, lower income groups are slammed by rising inflation as they may not have many savings and their wages have not increased proportionally to higher prices. In the webinar, Pattie mentioned that lower income groups need emergency funds, and many are tapping into credit cards or lines of credit as a solution. However, the CHIP Reverse Mortgage can be a better alternative for Canadians 55+ who have equity in their home. They can turn their equity into tax-free cash to increase their monthly cashflow and weather today’s economic climate.   2. Pros and Cons of a Reverse Mortgage: As with any financial tool, there are pros and cons. In the webinar, Pattie and Yvonne highlight one of the biggest benefits of a reverse mortgage is that it gives people access to much needed cash during turbulent times. For example, with high inflation, many people find it difficult to afford regular expenses such as their mortgage payments. A reverse mortgage can be a great solution for individuals in this situation as it offers them an opportunity to use the equity in their home and use the tax-free cash from their home as a source for emergency funds. On the other hand, Pattie also points out that one of the biggest costs associated with reverse mortgages are the high interest rates especially in comparison with other financial products such as conventional mortgages. However, the gap in interest rates between conventional mortgages and reverse mortgages is far lesser today than it was six months ago. Furthermore, a premium exists for a reverse mortgage because with a reverse mortgage, your client is not required to make any monthly mortgage payments. In addition, HomeEquity Bank has a No Negative Equity Guarantee which ensures that if your client meets their mortgage obligations, HomeEquity Bank guarantees that the amount they will have to pay on their due date will not exceed the fair market value of their home. If their home depreciates in value and the mortgage amount due 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.   3. Product Options: Another key takeaway from Pattie and Yvonne’s webinar was the discussion of HomeEquity Bank’s Income Advantage product and its value in today’s economic climate. The Income Advantage product allows your clients to take money in smaller increments, which can be especially valuable in today’s climate of higher interest rates, as it only charges the interest on what they have borrowed. Instead of taking out all the money they have been approved for, with Income Advantage, your client can just take some of it for their current needs such as paying off a car loan or credit card. After this, with the remaining money, your client can receive monthly increments of any amount that they choose to supplement their income.   4. Misconceptions: In the webinar, Pattie and Yvonne also dispel one of the biggest misconceptions surrounding reverse mortgages. This misconception is if a client lives for too long then they will run out of money and will have none left in the later years of their retirement. However, this is false because as clients age, the value of their home continues to appreciate so it’s highly likely that they will still have plenty of equity in their home to assist them in the later parts of their retirement. In fact, Pattie and Yvonne explain that in around 99% of situations, clients still have money left over for the later stages of their retirement.   5. Independent Legal Advice: One of the most important things that Pattie and Yvonne talk about in the webinar is the importance of independent legal advice (ILA) in the process of getting a reverse mortgage. The process of ILA exists to protect the mortgage broker, advisor, and most importantly the client when getting a reverse mortgage. Before anything is finalized, clients must get ILA through a lawyer they trust. The lawyer carefully explains to the client what a reverse mortgage is and exactly how it works. Furthermore, the lawyer may also discuss other financial tools with the clients such as downsizing or HELOCs in order to ensure that the best available option is being made. The process of ILA is crucial to keeping the clients and everyone else involved protected.   If you would like to hear from Pattie and Yvonne yourself and see them delve into even more details about these takeaways, then click here to watch a recording of the webinar.

As advisors, it's crucial to recognize that navigating finances as a couple can be sensitive. Money discussions often evoke feelings of comparison and envy, leading many to avoid the topic altogether. However, it doesn't have to be this way. It’s important to inform clients that they can’t fall in love with money and expect it to love them back. It won’t. Yet, couples still face challenges often rooted in differing money values inherited from their upbringing. In my household, we are very transparent with our children about our financial situation, the decisions we will be making today and, in the future, what they can count on and where they must fend for themselves. We strike a balance between compassion and empathy. Ultimately, our decision as a couple is to move forward with decisions that matter most to us. As an advisor, you should encourage couples to have these types of money conversations at critical junctures in their life. They may occur when the couple moves in together, decides to have a family, makes career choices, debates spending versus saving, and even discusses where and how they enjoy their retirement. The point is that regular “money meetings” are essential for couples to prepare for any significant expenditures and life decisions they may have. It is not a one-and-done conversation. Life is full of changes, and Plan A can quickly turn to Plan B, and your clients must pivot accordingly. I was intrigued by a couple I met at a recent HomeEquity Bank reception. They told me that despite little money early on in life, they didn’t focus on scarcity. Instead, they focused on abundance and celebrated the little milestones, not wanting to miss out on life and waiting for the significant events. I found this perspective so profound. I decided to probe further to determine how they had reached this point. It all came down to one word: options. This couple reached out for help, asked many questions, and listened objectively. They trusted their advisor and were realistic in their expectations. It was a true partnership that has helped them get to where they are financially today. Money isn't meant to be loved. It is intended to be spent, shared, and used to help the less fortunate. Back to the word “options". That evening, it was reinforced why I joined HomeEquity Bank: people want to have options they can explore to fund the lifestyle they want to enjoy. All they need to do is have the conversation and permit themselves to look at all the options openly and transparently as a couple. That evening, many clients spoke up and shared their financial decisions, challenges, and the options they chose that were right for them. There was no shame, embarrassment, or hesitation—just a frank, fact-finding, open dialogue. Recognizing our progress in destigmatizing money conversations is important but remember that it's ongoing. Encourage clients to keep the dialogue going and remain open to exploring all available options together. Pattie Lovett-ReidChief Financial CommentatorHomeEquity Bank

Tax season is upon us once again, and with it comes the flurry of paperwork and deadlines. As wealth advisors, it's crucial to ensure that both you and your clients are well-prepared to navigate through this period without any unnecessary stress or financial setbacks. Let's take a moment to review some friendly tax reminders that can help avoid common blunders and ensure a smooth tax season ahead. Important dates and deadlines. TFSA: The Tax-Free Savings Account contribution limit for 2024 has increased to $7,000. RRSP: Remind your clients to review their Notice of Assessment to confirm their individual contribution limit. Avoiding Penalties and Maximizing BenefitsThe tax filing deadline matters! If your client owes money, the penalty is hefty if they miss the deadline. There is a 5% penalty for filing late, and that’s not all; add a 1% penalty for each additional month they are late. The interest costs can add up quickly. Claiming benefits can sometimes be tricky. Some of your clients may miss benefits they are entitled to, and others will overstate benefits they feel they are entitled to. Claiming benefits is often in a grey zone, so encourage your clients to seek expert advice when unsure about their eligibility for certain benefits. The cost of professional guidance is often far less than the potential expenses associated with an audit. Maintain Accurate Records – Be Prepared for Potential AuditsEven if your client believes you've filed correctly and claimed all relevant deductions, it's essential that both parties keep thorough records. The Canada Revenue Agency (CRA) can audit tax returns for up to seven years after filing. Avoid the headache of retroactive repayments by maintaining organized records and retaining all receipts. Common-law relationships can impact tax filing status. If clients have lived with their partners for more than 12 months, they may be considered a couple for tax purposes, regardless of marital status. It's important for clients to understand these nuances to ensure accurate tax filings. Ensure clients declare all sources of income, including earnings from employment, investments, rental properties, and business ventures. Tax avoidance, while not illegal, should be approached cautiously, as the CRA discourages such practices. Failure to report income can result in penalties and legal consequences. In Canada, if you have income from any source, you must file a return. Utilize Available ResourcesLastly, inform clients about online resources like the My Service Canada Account portal. This platform allows users to access important tax documents, view past returns, and apply for various government services conveniently. By staying informed and proactive, clients can maximize their financial benefits while minimizing potential errors. It’s important to guide our clients through the intricacies of tax season and help them navigate potential pitfalls. By staying informed about important deadlines, maximizing benefits, maintaining accurate records, and utilizing available resources, we can ensure a successful and stress-free tax season for all parties involved. Remember, the CRA is a lifelong business partner, and collaboration is key to achieving financial success. It’s better to work with them and not against them. Pattie Lovett-ReidChief Financial CommentatorHomeEquity Bank

With each technological advancement comes a more sophisticated fraudster, and if there is a way they can figure out how to convince your clients to part ways with their money, they will.  Cyberattacks and fraud are escalating. In 2023, Canadians lost $554M due to fraud. Sadly, fraud is big business.  Fraudsters don’t discriminate. Canadians of all ages are targeted, and all are equally as likely to fall for online scams.  However, there has been a long-standing belief that Boomers are more likely to fall prey than any other generation. While Boomers are highly targeted, a recent survey by Ipsos commissioned by HomeEquity Bank found Boomers are more vigilant online than any other generation and, as a result, are no more likely to be victimized.  Boomers are smashing stereotypes and pushing back on the tired punchline that they are more likely to fall victim to scammers because they are less tech-savvy and more susceptible to being tricked. It simply isn’t the case. Canadians 55+ are indeed targeted more frequently, with over half reporting scammers targeting them. But when it comes to falling for scams, every age group is equal. Baby boomers are no more likely than any other generation to fall for a scam. Older Canadians have done a great job educating themselves but must continue to stay vigilant. Scammers are becoming more sophisticated and will continue to come up with new ways to outsmart your clients. Here are a few basics to ensure your clients stay cyber-safe and avoid potential scams and scammers.  Inform clients to never open an email, text or direct message from someone they don’t know. The risk is too significant. It is important for your clients to be suspicious of new websites and links. Your clients should familiarize themselves with the source before they click on anything. Advise clients to avoid using easy-to-hack passwords such as family member names or birthdates. It’s also key to note that your clients should not share any private information with family or friends as they can’t be sure others are as cautious as they are. It’s crucial that clients upgrade and update their software and maintain preventative software programs, which will help to secure their data. Encourage your clients to stay up to date on the latest cyber threats. Your clients can do everything right yet still fall victim to a scammer. If clients receive a call or text from someone they know, they should be cautious but can respond. However, if the message seems strange or out of character, it might indicate their friend or family member's account has been hacked. Instead of responding directly, they should find another way to check if it's legitimate, like phoning them separately, to verify the information. These scammers have upped their game. Clients should always report suspicious activity by calling 1-888-495-8501 or online via the antifraudcentre.ca.  Finally, if your client thinks they have released too much personal information, they should not be embarrassed or ashamed because it happens to smart and tech-savvy people all the time. However, your clients should immediately notify their financial services provider so measures can be implemented to protect them and their money. Pattie Lovett-ReidChief Financial CommentatorHomeEquity Bank

A recent research paper, released in the fall of 2023 by the Canadian Foundation for Financial Planning (CFFP), covered seven home equity release strategies for Canadians to consider to fund their retirement. For many Canadians, their home equity may have replaced individual pension and personal investment assets as their most significant household asset. Options for an equity take out on their homes include a reverse mortgage, a home equity line of credit (HELOC), a second mortgage (non-HELOC), or refinancing. Another option for homeowners is to sell and downsize, sell and rent or lease back, or sell and move to a rental dwelling. All are viable options; however, the challenge is that one size does not fit all. And it isn’t always about the money. The CFFP research found that 59% of respondents indicated a strong emotional attachment to their home. While 42% agree they would like to stay in their current home during retirement, 44% do not think of their home as a way to fund retirement. Let’s break down some of the features and benefits of the three most popular options. The CHIP Reverse Mortgage by HomeEquity Bank may be appropriate for someone 55+ who wants to stay in their home and is prepared to keep up the home’s maintenance, insurance, and taxes. No monthly repayments are required as long as they remain in their home. The product is best suited for someone who wants to stay in their home while still benefitting from their home appreciation. They can borrow up to 55% of the equity in their home. (depending on homeowners age, location of property etc.) A Home Equity Line of Credit [HELOC] is appropriate for someone who wants to stay in their home. The product has competitive rates, and homeowners can borrow up to 65% of the equity in their home. They must keep the house in good standing and make regular payments, so proof of income is required to facilitate this. This option is also suitable for someone who wants to stay in their home, age in place and where cashflow is not an issue. Downsizing comes with emotional strings attached. Research conducted for HomeEquity Bank found that 93% of Canadians want to age in place. They will be required to fund this and relocate to a new home, which may or may not work. Costs can escalate, and while the footprint may be reduced, there is no guarantee the costs will be reduced. These are challenging and emotional decisions that both clients and advisors are faced with. As Boomers age, there are fears of outliving their money, losing financial control, and declining health, which could limit independence. These are not new issues but are coming to the forefront as Boomers retire. The financial reality of Canadians 55+ is concerning.• The average 65-year-old has an income shortfall of $20K annually• Limited pensions. Only 39% of Canadians aged 55-64 have a company pension• Many Canadians will outlive their money. The average Canadian has less than $200K saved• 43% of Canadians have their wealth tied up in home equity There is comfort in knowing they aren’t alone, and there is comfort in having options. The good news is that they have a choice that is right for them. Knowledge is power, and as a trusted advisor, you can help steer them in the right direction suited for them. To learn more about the CHIP Reverse Mortgage and how it compares to other home equity release strategies please contact your HomeEquity Bank Business Development Associate (BDA) or Business Development Manager (BDM) on our BDM finder. Pattie Lovett-ReidChief Financial CommentatorHomeEquity Bank

Living with debt is a challenge at any stage of life, but navigating debt during retirement can be particularly daunting, especially without a steady income stream. Fortunately, a financial solution could provide relief: debt consolidation mortgages. However, not all consolidation options are created equal, and for retired individuals, qualifying for traditional methods can be tricky due to credit score requirements and lack of regular income. So, what is the best solution for clients to consolidate debt in retirement? The CHIP Reverse Mortgage by HomeEquity Bank. Benefits of Consolidating Debt During Retirement In recent years, many Canadian retirees are entering their golden years burdened by debt. Statistics reveal that many retirees still grapple with unpaid credit cards, car loans, and mortgages. Consolidating debt offers several advantages, including: Simplifying monthly payments Leveraging assets like home equity to expedite debt repayment Maintaining or improving credit scores through consistent payment Options for Debt Consolidation in Canada When seeking a solution to consolidate debts in Canada, such as a single-payment option, your clients have multiple choices. However, each of these consolidation options comes with specific criteria or characteristics that may pose challenges during retirement, particularly for those with a limited or reduced fixed monthly income. When clients borrow through their retirement savings account, it can result in an incremental withholding tax, as well as income tax, regardless of their age. Pledging assets for a secured debt consolidation loan means clients risk losing them if they fail to meet the repayment terms. Getting low interest rates on an unsecured loan may be difficult if clients have a poor credit score, or insufficient income to cover the debt. Using refinancing, HELOC or a second mortgage not only needs a minimum credit score, but the interest rates may be high, and upon non-payment, clients run the risk of lenders foreclosing on their home. Signing up for a structured debt consolidation loan through a 0% balance-transfer card may require your clients to provide proof of income to cover monthly minimum payments. Why the CHIP Reverse Mortgage is the ideal solution for Debt Consolidation The CHIP Reverse Mortgage stands out as an optimal choice for retired Canadians looking to consolidate debt for several reasons: No Monthly Mortgage Payments: With the CHIP Reverse Mortgage, clients can tap into their home equity to pay off high-interest debts without worrying about monthly principal or interest payments. The loan only becomes due when they sell the property, move, or pass away. Easy Qualification: Unlike traditional loans, eligibility for the CHIP Reverse Mortgage isn't contingent upon income, credit score, or health status. If clients are 55 or better and own their home, they're likely eligible. The property's value and condition determine the loan amount. Tax-Free Access to Equity: Clients can access up to 55% of their home's equity to receive tax-free cash, enabling them to consolidate debts and cover other expenses without incurring additional tax burdens. Preservation of Retirement Funds: The CHIP Reverse Mortgage doesn't affect eligibility for government benefits like OAS and GIS or income from RRSPs, allowing retirees to maintain financial stability while accessing additional liquidity. Flexible Payout Options: The CHIP Reverse Mortgage offers flexibility in how clients receive funds, whether as a lump sum, regular payments, or a combination tailored to their needs and preferences. Retain Home Ownership: Clients retain home ownership with the CHIP Reverse Mortgage, ensuring they can stay in their beloved residence while reducing monthly debt obligations. Protection from Market Fluctuations: The CHIP Reverse Mortgage by HomeEquity Bank provides a No Negative Equity Guarantee2, safeguarding clients and their heirs against owing more than the home's market value, even if it falls short of the loan amount. Many debt consolidation options for Canadian retirees come with strict eligibility criteria, challenging repayment terms, tax burdens, and the risk of losing asset ownership. However, the features and benefits of the CHIP Reverse Mortgage are unparalleled, especially as your client transitions into retirement. To learn how the CHIP Reverse Mortgage can serve as a powerful and flexible tool for consolidating debt, contact your HomeEquity Bank Business Development Manager (BDM) or Business Development Associate (BDA). 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.