Residential property is universally accepted as a sound investment which historically increases in value over time.
If you’ve paid or mostly paid off your home, you may well be reaping the rewards for buying when you did and seeing your investment grow.
While it’s certainly a comfort to know you have accumulated a decent amount of wealth in your home, what if you could really use some of that saved value to live better now?
But you don’t want to sell your home!
If you are over 60 and own or mostly own your home, then you can use a reverse mortgage to access income or a lump sum of cash while still retaining significant equity – as well as the ownership and right to remain living in your home.
You’ve probably heard of reverse mortgages before and maybe even some things that might make you wary of them.
According to Smooth Retirement’s Scott Phillips, significant government protections for borrowers have been introduced with reverse mortgages now one of Australia’s most regulated financial products.
“All Australian reverse mortgage borrowers are protected by the no negative equity guarantee which means they cannot owe the lender more than their home is worth.
“Plus, the legislation extends to protect borrowers so they cannot be removed from their homes.
“There’s also been lots of changes to the loans themselves in recent years including the introduction of variable interest rates, abolition of exit fees (so you can change your mind and sell your home at any time) and the move to conservative and stringent loan to value ratios – so people cannot borrow more than they should.”
Reverse mortgages can be a good solution for many over 60s. Here’s the five key benefits of using a reverse mortgage loan:
- You can live better by increasing your income – without selling your home.
- You can fund big purchases such as a new car or caravan, travel, home maintenance or medical treatment.
- You can get rid of financial stress by refinancing existing debts – including a forward mortgage – with no regular repayments required.
- You can remain living in your home for as long as choose OR change your mind at any time, sell the home repay the debt without any penalties.
- You can have peace of mind knowing you have access to emergency funds should you ever need them by setting up a cash reserve.
You can apply for a reverse mortgage directly with the lenders or via an accredited broker.
“As with all big financial decisions, it’s important that you seek advice before entering an agreement for a reverse mortgage loan,” Mr Phillips said.
For more information call 1300 510 015 or click HERE to book your free, no obligation reverse mortgage eligibility check.
Smooth Retirement Pty Ltd provides equity release broking and retirement income planning Australia-wide. ABN: 46 619 010 445; AFSL 510015; Australian Credit Licence: 510015; smoothretirement.com.au; firstname.lastname@example.org; 1300 510 015.