What is a Reverse Mortgage?
Many seniors are now living in family homes that hold much of their wealth. By accessing some of this wealth without having to move, you can do the things you need, or have always wanted to do and live the retirement you deserve.
A Reverse Mortgage enables you to use some of the money tied up in your home without
having to sell it by taking out a loan secured against your home. The total loan amount, including
accumulated interest over time, is usually repayable when you move permanently from your home. This could occur when you sell your property, move into long term care or pass away.
You continue to own and live in your home for as long as you wish, benefiting from any potential increase in property values. Making regular repayments is not necessary, although you are generally free to do so. The amount you can borrow is typically based on your age, property location and the value of your home.
Reverse Mortgages are designed to help you manage your financial requirements by accessing
only what you need, either in an upfront payment, or payments over time as and when you need it.
What can I do with the money?
Reverse Mortgages are generally available for most purposes. Many people use the loan to take-out existing home loans or other loans outstanding to ease the financial pressure in retirement.
They can also be used to fund home repairs or improvements, travel to visit family members, pay for medical procedures, upgrade to a more reliable car, assist with in-home care, or a host of other uses to make life easier and more comfortable.
Fundamentally, a Mortgage is designed to help you live a better retirement. The Reverse Mortgage is designed primarily to release funds to improve your quality of life.
Most Reverse Mortgage lenders will not grant the funds for investment, business purpose, or to gift large amounts to family members (without proper explanation).
You will be required to have all documents witnessed by a legal practitioner, and we strongly recommend you discuss the proposal with your financial adviser and your family/children.
You should contact Centrelink to discuss any impact borrowing may have on your pension or other
Who can apply?
Anyone aged 60 or over who owns their own home can apply for a Reverse Mortgage.
The Aged Care Option is available for those residing in or moving into permanent long-term care. It has a maximum term of 5 years, and is designed to cover you through that transitionary period whilst you relocate to the Aged Care facility, and then look to sell the family home over the following few years. Any customers who currently reside in and intend to stay in (or hold long term) their home should not consider or select this option.