What is a Reverse Mortgage? |
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A reverse mortgage is a finance facility which has been specifically designed for senior Australians to help them access the substantial amount of equity tied up in their homes. Funds borrowed against the equity in their home can be used for any purpose to help seniors enjoy a better quality of life than would otherwise be available.
Reverse mortgages have rapidly become an important retirement planning solution allowing seniors a flexible way to finance important projects without being forced to sell the family residence and without the worry of having to make regular monthly repayments to the lender.
Funds can be taken in the form of a cash lump sum, monthly income, a cash reserve fund or a combination of all these methods.
The lender will register a mortgage over the property and hold the title as security in the normal manner. Income is not assessed and monthly repayments during the life of the loan are not required from seniors but may be made voluntarily. Generally, but not always, the outstanding loan balance, including accrued interest and fees, is repaid when the house is sold or passes to the estate of the last surviving borrower. |
