Reverse Mortgages
Reverse mortgages allow you to borrow cash against the value of your home. No repayments are required during the term of the loan, instead the interest and other charges you would ordinarily pay are added to the loan balance, which becomes payable either by the estate of a deceased borrower, when the borrowers leave the property and move into care or sell the property.
More Information or Help With Your Reverse Mortgage
If you would like to talk to us confidentially about reverse mortgages or other home loan options, fill out the form below or call 13 LOAN (or direct on + 61 2 9249 3739) and we will return your call within 2 business hours.
This is a completely obligation free process and we charge no fees for giving general advice in relation to residential home loans.
Advantages and Disadvantages of Reverse Mortgages
| Pros |
Cons |
You can access cash as a lump sum, a regular stream of income or a combination of both to suit your needs. |
Interest rates are usually higher than average home loan rates. |
You don't need a current income to qualify. |
Because the interest builds up (or compounds) over the term of the loan, the debt can rise quickly, to the point where it may even be more than the value of your home. |
You get to stay in your home and keep ownership. |
If you don't maintain the property to a standard required by the lender, you may lose your no negative equity guarantee and the lender may be entitled to evict you. |
You usually don't have to make any regular repayments while you live in your home. |
The loan may affect your eligibility for a pension. |
A No Negative Equity Guarantee on Your Reverse Mortgage
There is a risk that the amount of the loan may increase to a point where it is more than the value of your home. This is called 'negative equity'. Fortunately, most reputable lenders offer a 'no negative equity guarantee' so even in a disastrous property market you will never owe more than the value of your home. But you may lose this protection if you don't meet the terms and conditions of the loan - for example, if you don't repair and maintain your home to a standard set by the lender.
Reverse Mortgages can be a useful way to raise funds without selling your family home but as with any loan, it is advisable to talk to your local mortgage broker to ensure that this is the right solution for you.
More information or help
For confidential assistance with your home loan or to talk to your local mortgage broker, call us at any time on 13 LOAN or call our direct line on +61 2 9249 3739.
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