Reverse Mortgage

Many seniors are now living in homes that hold much of their wealth. By accessing this wealth without having to move or relinquish ownership can open many doors for someone in this situation. This is called a Reverse Mortgage.

Put simply, A Reverse Mortgage enables a person to access the equity in their home without having to sell their property.

This type of mortgage can free you up to do the things you have always wanted to do, like take a holiday, buy a new car, complete some much-needed renovations or simply have a little extra cash to supplement your existing income streams to make life a bit more enjoyable.

The amount you are able to borrow depends on a number of factors, such as your age and the value of your home. You are able to live in your home for as long as you wish, benefiting from any potential increase in property values.
The Reverse Mortgage becomes repayable when you sell your property, move into long-term care or pass away.

Aged Care Accommodation Bonds.

If you have a parent or have a partner that requires aged care accommodation but you are not willing or able to sell the family home immediately, then another option might be an Accommodation Bond.

Rather than selling your home to pay for the bond, the Aged Care Accommodation Bond allows for money to be released from your property to help pay the aged care facility. This is called the RAD (Refundable Accommodation Deposit) and is refunded to you or your estate when you leave care – this bond must be paid back within 5yrs of its inception.

Both Reverse Mortgages and Accommodation Bonds are very complex products and require a great deal of research to ascertain if they are suitable for your circumstance.

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What is the impact on your social security?

Talk to the Department of Human Services’ Financial Information Service to check how a reverse mortgage would affect your pension entitlements.

Think about your future and what costs there might be You may not want to think too far into the future or about how your health and living situation might change 10, 20 or even 30 years from now. But it is important that you start planning now for the extra costs you could incur like medical expenses and aged care, so that you will have enough money left to cover them.

How should you take the loan?

You can take the loan as a lump sum, regular income stream, line of credit or a combination of these options. Regular income stream payments may be less costly than a lump sum. Use our reverse mortgage calculator to work out the most cost-effective options.

Get independent legal advice

Ask your legal adviser to explain the fine print of the reverse mortgage contract so you understand the consequences of breaching any terms and conditions.

A reverse mortgage can be useful to relieve financial pressure or improve your lifestyle. Be aware of the conditions of the loan and the choices available. Use a licensed mortgage broker and seek financial advice before you commit to a reverse mortgage.

Download your reverse-mortgage-information-statement

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The Loan Operator (490658) and Steve Morrison (387547) are credit representatives of NewCo Financial Services Pty Limited Australian Credit Licence 385054.
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