What is a reverse mortgage? It is a loan that allows you to convert some of the equity accumulated in your home into cash without selling up or paying a monthly mortgage. You could qualify for a reverse mortgage if you are 60 years or older and own your own home. Consult a financial professional to discuss the correct options for your requirements.
You receive payments from the lender based on the equity in your home. The amount of these payments depends on your age, your house’s value and the prevailing interest rate. In addition, the payments can be in lumpsum, instalments or credit.
Reverse Mortgage vs a Traditional Mortgage
The main difference between a reverse versus a traditional mortgage is that the homeowner is not required to make monthly payments. Rather, the fees and interest are included in the overall outstanding balance. In a typical scenario, the loan is paid off when the house is sold or the owner moves out or passes away. However, if your wish to make payments you can do that at no extra cost.
Bear in mind that a reverse mortgage can reduce the equity in your home over time. If you are interested in a reverse mortgage, approach a reputable adviser such as ourselves.
More than a decade’s experience consulting with senior Australians and Self-Funded Retirees regarding specialist credit products designed to support retirees.
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