Reverse Mortgages

Successful Money Management – helping the Geelong finance market for over 10 years.

What Is A Reverse Mortgages?

Reverse mortgages are designed to allow retired home owners or the elderly access to the equity in their existing home to assist them with everyday living expenses without the drastic step of having to sell their homes.

The requirements for Reverse Mortgages vary depending on the lender but generally are available to residential property owners over the age of 60.

How do Reverse Mortgages work?

Example: your property, valued at $500,000. Say you take out a reverse mortgage and borrow $100,000. Once again depending on the individual reverse mortgage product, you should be able to take the $100,000 as either a lump sum or regular income or a combination of both. Either way, you accumulate interest on borrowings as they are drawn. You generally can’t rent the property, and you remain responsible for maintenance and similar costs. If you sell, you simply discharge the mortgage in the usual way or, when you die, the lender or estate sells your home, and takes what they’re owed: principal (less any repayments) plus capitalised interest.

Repayments

As noted, generally, no repayments are required on a reverse mortgage until the borrower sells the home, dies or permanently moves out, with interest payments in most cases being added to the balance. You can usually choose to make regular repayments or lump-sum repayments if you wish.

What Can You Use Funds for?

Generally the funds can be used for any worthwhile purpose and typically people are using them to fund:

Home Improvements
Investment Opportunities
New Car
Holidays
Medical Procedures and Expenses
Emergency Funding

Please contact Successful Money Management should you be considering a Reverse Mortgage.