Reverse Mortgage Hoam Loans
At AussieWise we have access to a number of Reverse Mortgage Home Loan solutions from our Lending Panel.
As our population is ageing, retirees are facing many challenges funding their retirement to ensure that they maintain their Lifestyle; Reverse Mortgage Home Loans assist in doing just that.
Also our Life Expectancy has increase and Australians are living longer, there is a need to consider all options and a need to contemplate more than 25 years in retirement.
Why consider a Reverse Mortgage Home Loan?
Reverse Mortgage Home Loans provide our retirees with an option of additional funds in retirement.
Commonly Reverse Mortgage Home Loans are used for a number of reasons including Home Improvement, the purchase of a new vehicle, a well earned holiday, clearing other debts and day to day Life Style Expenses.
As many of us, you may be asset rich (equity tied up in your home) and your superannuation is not enough to sustain your Life Style at retirement, therefore A Reverse Mortgage Home Loan can assist in supplementing your monthly income and provide comfort in maintaining your regular expenses.
Reverse Mortgage Home Loans versus a Standard Mortgage:
With a Standard mortgage, clients borrow funds to purchase a Residential or Investment Property and it is expected that regular monthly payments are made to the Lender.
Generally speaking you will pay off you Home Loan over a period of time and own your property outright.
This is where a Reverse Mortgage Home Loan differs. In general terms the Lender advances the funds secured on your property and regular payments are not required during the period.
The Reverse Mortgage Home Loan allows you to tap into the equity of the property to sustain your Life Style without regular payments. Interest and fees are capitalized and the Reverse Mortgage Home Loan increases over time.
This effectively allows flexibility with no repayments and provides you with funds to ensure a comfortable retirement.
Qualifying for a Reverse Mortgage Home Loan
To qualify for the Reverse Mortgage Home Loan clients generally need to be over 60 years of age and own their own home.
Income, savings or financial Assets do not come into calculation as the Funds made available are associated to the property.
As there are many Reverse Mortgage Home Loans available from a number of Lenders, we at AussieWise will look at each Lenders criteria and ensure that the appropriate Reverse Mortgage Home Loan option is considered.
How much can you borrow with a Reverse Mortgage Home Loan?
Each Lender providing Reverse Mortgage Home Loans will have there own criteria when applying. It is normally the age of the youngest borrower and the age of your property.
The maximum Loan to Value that you will be able to borrow will also be determined by your age.
The older you are the higher LVR will apply.
There are some points that you should consider with your Reverse Mortgage Home Loan, lenders will typically require the repayment of the loan including interest and fees.
This will be done on either the sale of the property or the passing of the last surviving partner.
Ensure that you check your Reverse Mortgage home Loans timeframe to repay the loan through your Estate, and that you should only consider taking out a reverse mortgage home loan from lenders that offer a no negative equity guarantee.
Also note that lenders will also allow borrowers to transfer their Reverse Mortgage Home Loan to another security subject to underwriting conditions.
Reverse Mortgage Home Loan Rate Options:
The Interest Rate options on your Reverse Mortgage Home Loan are similar to traditional mortgages and these being fixed rates and variable rates or a combination of both.
With a Fixed rate Reverse Mortgage Home Loan can be taken for as little as one year up to a maximum of the entire life of the loan.
As you would be aware, the advantage of a fixed rate is the security of knowing what your Reverse Mortgage Home Loan balance would be.
This is because the same interest and fees will be added to your home loan and the concern that your interest rate will increase has been eliminated.
You also have the option of a variable rate on your Reverse Mortgage Home Loan, and with some lenders, this may be the only option.
The Interest rate may vary up or down during the life of the loan, and is linked to the Reverse Bank’s interest rate settings. As you are aware, the benefit of the variable rate is that lenders allow partial or total repayment of the Reverse Mortgage Home Loan, without any early repayment fees.
The main disadvantage of the variable rate is that you cannot forecast with any certainty what your loan balance will be.
It may then be beneficial to consider, if the option is available, of having a combined fixed and variable rate associated to your Reverse Mortgage Home Loan.
Important Features of a Reverse Mortgage Home Loan:
Many Lenders today are looking to provide their clients with a Reverse Mortgage Home Loan, and choosing the right structure is very important, especially as each lender will look to market their point of difference to you.
However there are two important Reverse Mortgage Home Loan product options which must be considered.
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How would you like to receive your funds, and |
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The interest rate structure of your Reverse Mortgage Home Loan. |
There are also many options to consider and in general terms may include the following: -
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Whether to receive your Reverse Mortgage funds as a lump sum |
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Receive a funding limit that your can draw funds from time to time when required, or |
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Receive a number of monthly payments over an agreed period of time from your Reverse Mortgage Home Loan. |
You will also be able to have a combination of the above. i.e. your Reverse Mortgage Home Loan may provide you with a lump sum and a regular monthly payment depending on your needs.
To determine which option is the most suitable and what Reverse Mortgage home Loans are available will depend on what you require the funds for.
Therefore our Customer Care consultants and our Financial Planners will be able to guide you through this process.
Please feel free and AussieWise Finance Group Pty Ltd to discuss these options further.
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