The Seniors Lifestyle Loan
Specifically designed for those aged 60 and over, a Reverse Mortgage Loan can be a real Godsend to those reaching retirement, with a mortgage on their home, or inadequate superannuation or savings. The pension is usually insufficient for the accustomed lifestyle or the unplanned medical expenses, let alone special treats or retirement dreams. There are plenty of Australian Seniors struggling to make ends meet.
The obvious choice for Seniors with inadequate funds, is to sell their home and downsize, but this choice can be costly. On the selling side, costs include Real Estate Agency commission, typically 2.2% to 3.3% of the selling price, marketing and advertising costs, legal fees and moving costs. On the buying side there are legal fees and stamp duty, plus quarterly Strata Levies on many properties.
Many Seniors want to stay in their family home. They may be daunted by the idea of letting go of their possessions, packing, and moving to an area away from friends and family. There is a big emotional cost for most.
One option which is gaining popularity, is to take portion of the value of the family home as a Reverse Mortgage. A Reverse Mortgage provides financial freedom to enjoy retirement without disconnecting from current life and social contacts, avoiding the previously mentioned expenses, and taking advantage of the potentially greater capital gain on the more valuable current family home.
The amount that can be borrowed is a percentage of the value of the property, based on the age of the youngest applicant, starting at 15% at age 60 and increasing by 1% each year to 25% at 70, 30% at 75, 35% at 80 years old and 45% at 90. An investment property or holiday home can be used as security at a reduced percentage. The security property must be able to be sold on the open market and have a minimum value of $200,000.
A Lump Sum is drawn on settlement and a Cash Reserve arranged for the difference between the maximum approved loan and the initial lump sum. Additional amounts can be drawn as needed from the Cash Reserve. Alternatively, a Regular Payment Facility can be arranged for monthly or quarterly advances. Additional amounts can be applied for as the applicants age and the value of the property increases.
No repayments are required. Interest is capitalised to the loan which is guaranteed never to exceed the value of the home no matter what happens in the housing market. If desired, a percentage of the home value can be protected with the Equity Protection feature.
Loan proceeds can be used for any worthwhile purpose such as home improvements, motor vehicle, caravan, in home care, debt consolidation, day to day living expenses, or to travel and live one’s dreams.
Applicants are advised to discuss their intension to take a Reverse Mortgage with their family and check with Centre Link to ensure benefits are not affected. Centre Link issues raised are usually overcome by changing the way the Reverse Mortgage funds are taken. Legal advice is required when signing the loan documentation and provides protection for Seniors. As well, The Seniors Loan Specialist will guide you with specific product information and how it applies to you, and as make sure you understand the loan fully.
No longer do Seniors need to rely on the Bank of Son and Daughter. Seniors take on a new lease of life when they are provided more financial freedom and are so much happier knowing they are providing for themselves from their own resources.
One word of warning:
The Home Reversion Scheme is an equity release scheme where the provider purchases a percentage of your property for an amount which is usually less than market value and becomes a part owner on the Title of the property. It is NOT a Reverse Mortgage. It is NOT a loan, and it is NOT straight forward regaining full ownership of the property.
It is our pleasure to help you further. For more information about a Reverse Mortgage Loan, call The Seniors Loan Specialist on (02) 9653 2034 or
0414 903 443. Live the dream retirement.