Increased life expectancy is a cause for celebration, however with those extra years of life (and an increasing pension eligibility age) come increased financial pressures.
Currently, 89% of Australians aged 65 and over own their own home. While selling the property is one option to release funds if you’re finding it difficult to make ends meet, lenders now offer a reverse mortgage that could help you access your home equity without having to sell your home or move.
What is a reverse mortgage?
A reverse mortgage is like a normal home loan that has been designed for the needs of seniors. It allows people aged 60 and over to release home equity to live a better retirement. No regular repayments are required, the interest is added monthly to your account and the debt then repaid from the future sale of the property. Importantly, you continue to 100% own your own home.
What can you use a reverse mortgage for?
You can use the funds for any worthwhile purpose, including home improvements, travel, a new car, debt consolidation, medical costs, aged care, or living expenses. You also continue to remain the owner of your home, stay there for as long as you choose, and continue to receive any increases in home value.
How does it work?
Reverse mortgage loans are very flexible. The loan proceeds can be received as a lump sum, an income stream, or a cash reserve (like a ‘line of credit’), so you have flexible options depending on your preferences and needs.
Customer protection?
Reverse mortgages are arguably the most heavily regulated consumer finance product in Australia. As a result, reverse mortgages have considerable protection for customers, including a guarantee that you will never owe more than the net sale proceeds of the property, guaranteed lifetime occupancy and no requirement to make repayments until the end of the loan (with flexibility to repay in full or in part at any time).
Want to know more? Contact us for an obligation-free chat about your situation.