With the ‘credit crunch’ gaining momentum and the exiting from the market of several Reverse Mortgage Providers it is becoming more important to do your research and collect as much information as possible before talking to an Accredited Reverse Mortgage Consultant.  Always avoid a Reverse Mortgage that charges monthly fees in addition to the Compounding Interest.  It is also imprtant to ensure your Reverse Mortgage Providor gives a ”No Negative Equity Guarantee”, and is a member of SEQUAL. 

I have recently been approached by a prospective client insisting that it was better to have fixed interest rates as this was told to her by one of the banks.  I explained that with fixed interest rates she was locked in for a fixed period at a high interest rate and would incur a ‘break fee’ if she were to want to change to variable interest when  rates dropped.  None of this detail had been explained to this elderly lady.  It is always prudent to do your research before committing to a Reverse Mortgage.  Accumulate as much information as possible and talk to consultants qualified and trained in the detail of Reverse Mortgage.  

As the turbulence in the Credit Market intensifies, it is becoming a more difficult task to ensure you are chosing the Reverse Mortgage that is right for you.  It is important to ensure you have the correct information before making this choice.  It is to your benefit to use an experienced, accredited Reverse Mortgage Consultant to assist in your choice.

Until recently it was possible to obtain a reverse mortgage at age 55.  However, this has changed recently with the Lender who offered reverse mortgage at 55 withdrawing from the market. The minimum age is now 60, giving prospective borrowers a Loan Value Ration of 15%.

Reverse Mortgage or Equity Release should only be considered when all other available funds have been exhausted.  to consider a Reverse Mortgage while sitting on a sizable ’nest egg’ will prove costly as the interest you will be accruing on your reverse mortgage will far out weigh the interest you receive from your next egg.  It is far most cost effective to use up your available resources and then set up a reverse mortgage with a “Line of Credit” to make provision for emergencies, holidays etc.

When Researching your Reverse Mortgage and considering your future needs, factor in the possibility of emergency home repairs, unforeseen expenses with your motor vehicle etc.  When applying for you equity release only take as a lump sum the amount you need at the present time and condifer how much you would like to have in reserve in case of emergency.  The balance of the available funds may be left with the Lender as a Flexidraw Down facility.  By arranging the mortgage in this manner you will avoid paying additional fees if you need access to funds later on.  While ever these funds are held by the Lender they are not accruing interest against your account and therefore making your Reverse Mortgage work efficiently for you..

Frequently Seniors find themselves over burdened with numerous relatively small debts, including credit card debt at a significantly higher interest rate than a Reverse Mortgage. These debts need to be serviced on a monthly basis. By taking out a Reverse Mortgage to consolidate these debts into one larger debt eases the pressures.  Almost without exception the amounts they are outlaying on a number of smaller debts far outweighs the interest accrued on a Reverse Mortgage.  Although it is not necessary to repay a Reverse Mortgage they maybe able to service the interest on the Reverse Mortgage to maintain the debt level at the original loan if they wish, instead of finding that with credit card balance if the minimum payment cannot be met, is continually increasing.

Higher living costs appear to be impacting on Seniors and anyone of a ”fixed income” such as an allocated pension.  If anyone falling within this category owns their own home they may be able to access additional funds by way of a Reverse Mortgage.  This can be managed in a manner to limit the amount of interest that accrues by using the Reverse Mortgage as an “Income Stream” or as a “Line of Credit” or sometimes referred to as an “Emergency Fund”. All Consultants with Seniors First are trained to assist you make the decision that is best suited to your needs.

We at Seniors First are frequently approached by seniors who have an existing Reverse Mortgage with one of the bigger banks in order to establish if a cheaper product is available.  Almost without exception we are able to offer a cheaper product.  We have access to Lenders who offer cheaper interest rates and do not charge monthly fees.

When considering a Reverse Mortgage, always acquire as much information as possible before actually talking to your Reverse Mortgage Consultant.  Your Reverse Mortgage Consultant should be well equipped to answer any questions you may have.  Knowledge enables you the borrower to make an informed decision on which product best suits you.  At Seniors First all our consultants are accredited with SEQUAL and MFAA and have access to Calculators to estimate the eventual outcomes regarding your property equity.