Why should you avoid the big banks? Banks were the first to offer Reverse Mortgage Products, however, with the passing of time their products have remained unaltered charging high interest rates and monthly fees. Many Specialist Lenders have since entered the market offering a much more stream lined product at lower interest rates and without monthly fees. At Seniors First we only use lenders who are members of SEQUAL.
A popular myth I often hear is “Reverse Mortgage, that is where they take your house”. This is an untruth, usually voiced by those who have no idea of the concept of Reverse Mortgage. At Seniors First our consultants can demonstrate with a fair degree of accruacy what will happen to the equity in your home many years from now. In addition if you use and you should use a Lender who is a member of SEQUAL you will have a “No Negative Equity” guarantee.
Some Banks charge monthly fees on Reverse Mortgages. These fees are added to your loan. Once they are added to your loan you will find you are accumulating compounding interest. If you are debited $10 per month that is an extra $120 plus compound interest on your loan every year. There are many lenders in the Reverse Mortgage Market who do not charge a monthly fee and frequently their interest ratres are also cheaper.
Yes it is. You may elect to protect up to 20% of Equity in your Property to ensure the children are left with something. This is known as “Protected Equity”
It is not necessary for all residents of the property to be mortgaged to be on Title. For example, in the case of a married couple or a long term relationship if one partner is not on title the borrower may elect for the partner to be an applicant. If the borrower elects for their partner to be a nominated resident, the partner must seek Independent Legal advice with a Solictor of their choice.
The “No Negative Equity Guarantee” is the guarantee offered borrowers who use SEQUEL Accreditated Lenders. The No Negative Equity Guarantee means that no borrower will ever owe more than the value of their property regardless of how long they remain living in the residence.
Reverse Mortgage, like any other mortgage requires you to seek Independent Legal Advice. This is necessary for your protection so that you are completely aware of the terms and conditions of the loan and you understand exactly what it is you are signing.
Always the choice of the Borrower. Maybe it is time to consider opting for variable interest on your Reverse Mortgage as over the long term if interest rates begin to drop this will lower your Mortgage Debt and increase your equity at time of finalisation of the loan.
Some borrowers prefer to talk to CentreLink or their Financial Advisor before actually applying for a Reverse Mortgage. This is a good idea, giving them the confidence to proceed without any apprehensions of the impact on CentreLink Benefits. It is one of Seniors First Requirements that Borrowers at least talk to CentreLink. Some Lenders also require Borrowers to obtain Independent Financial Advice.
Should you have an unencumbered Rental Property and would like to access some of the equity this may be achieved. Providing you are 55 you may access equity and if you choose, repay the loan from the Rental Income. Please note it is not necessary to repay the loan however, voluntary repayments are acceptable.
