Reverse mortgage

Cresso2 · Veteran Member

Reverse mortgage

Peter_n_Margaret · Guru

S&BinL had one. Can be an appropriate method of spending some of your asset without selling it.
The interest on money advanced was 1% higher than a mortgage, but the benefit was that you are guaranteed not to be kicked out while you want to stay.
No repayment required unless the property was sold or you moved out.
Read the fine print carefully. A good idea for some people, but not for everyone.

Cheers,
Peter

glenn · Veteran Member

hi they seem to offer 20/25% of your property value as the max amount to give you

if you don't pay back they own the property in app 15 years

but they can't kick you out they have to wait till you cry pass

there is a lot on the net if you wanna read

regards Glenn

Aussie1 · Guru

Would strongly recommend anyone contemplating such a financial contract to seek as much professional advice as possible in addition to what glenn (above) stated "read as much as you can on the many web sites available".

SouthernComfort · Guru

Ultimately the best advice is to seek professional advice from an accredited and independent Fin. Adviser.

Roving-Dutchy · Guru

The best type to look at is where the bank in effect buys a portion of your property and advances you the money

They can never own more than the purchased percentage and receive their share when the property is sold.

I think Bendigo Bank is one of the banks that provide this type of loan.

I would steer well clear of any other type of reverse mortgage as your debt to the bank can double approximately every seven years.

Cheers

David

Izabarack · Guru

A bit like Pay Day loans from places like Cash Converters, is the way I have heard them described. Once in, it only gets worse. Only entity that wins is the one offering the mortgage. Sell and rent back for a fixed term is one strategy that seems to work if the future is somewhat predictable. Sale money invested will likely cover any rent costs.

Iza

Onedodger · Guru

We have had personal experiance ... I say NO NO NO.

PeterX · Senior Member

If you have not seem these ,

The moneySmart Website ( by ASIC ) normally has good info. So to, for AFR articles

www.moneysmart.gov.au/superannuation-and-retirement/income-sources-in-retirement/home-equity-release/reverse-mortgages
www.afr.com/personal-finance/budgeting/how-to-use-a-reverse-mortgage-to-help-fund-your-retirement-20150306-13xmfc

www.choice.com.au/money/property/buying/articles/reverse-mortgages-and-home-reversion-schemes

MOLLUSCAN · Senior Member

There is another way to earn an income from your property. Not a lump cash advance but fortnightly payments, through Centerlink. I think you can name the amount you receive up to the full pension amount and the interest is about 5% It is called the Pension Loans Scheme. I have copied info from the Centerlink website below. I think it would be far better than handing over a % of your property value as the property will increase in value and become a really large amount. On the other hand, the 5% interest paid using this scheme could probably be covered by the rising property values.

Just a thought

Pension Loans Scheme
This loan is for people who are of pension age but are ineligible for the Age Pension due to assets or income. Using this scheme you can access capital tied up in your assets to provide extra income. You are able to receive up to the maximum amount of the Age Pension, with payments made each fortnight.

-- Edited by MOLLUSCAN on Saturday 17th of March 2018 10:38:32 PM