Five Reasons Why Reverse Home Mortgages Are a Great Choice for Australian SeniorsDate: January 15, 2019
People frequently ask me why we are so passionate about Reverse Mortgages. I guess numerous Australian seniors are either cautious because of the misinformation and misconceptions that still remain in the market, or do not see how someone can be so enthusiastic about a ‘financial product’.
The factor that we love Reverse Mortgages a lot is that I have seen direct what they can do for people. I have actually spoken to, and consulted with, thousands of senior citizens whose lives have literally been changed by a Reverse Mortgage. I believe that’s pretty cool.
Am I overstating the impact? Life-changing?
I don’t think so you simply need to look at what you can do with reverse mortgages:
1. Reverse home mortgages can improve your standard of living
When you stop working, your regular income will be considerably lowered. Relying on your pension or superannuation may not suffice to sustain a comfy way of life. Remember, superannuation was just mandated by the Government in 1993. Therefore, if you started operating in the 60s or 70s, there is a lower possibility that you have actually gained enough fund for your retirement.
In a current report from The Association of Superannuation Funds of Australia they kept in mind that the Aged Pension only covers a third of what is considered to be a comfortable way of life in retirement.
Lots of Australians today don’t have sufficient money for their everyday expenses yet they live in properties that are worth hundreds of thousands. With a reverse mortgage, you can transform a portion of this equity, which you can utilize for aged care, home renovation, payment of debts, and much more.
2. Proceeds of reverse home loans can be utilized for debt payment
Nobody wishes to spend retirement still paying high-interest financial obligation. However lots of seniors surviving on pensions are utilizing credit cards if their funds are inadequate. With a reverse mortgage, you can save money on repayments while getting assurance. Normally, seniors are no longer eligible for a home mortgage or line of credit, but with reverse mortgage you can access the cash you require to pay all your financial obligation. Also, payments for reverse mortgage are not required, so you don’t need to stress over month-to-month charges.
3. Reverse home loan can fund your aged care requirements
While government support is readily available to enable seniors to stay at home to get aged care, the financial subsidy may not suffice to cover all costs and depends on an asset test. Wealthier seniors may not be qualified for any home care service benefits. If you have actually been examined as capable of taking on a portion of the house care services, your house care service provider may ask you to pay first either a standard day-to-day cost or an income-tested care fee prior to they offer you with support.
In reality, numerous senior citizens, specifically those with decreased earnings might still struggle despite of receiving government subsidy. It is necessary to keep in mind the cost of retirement living could increase in the next couple of years. The increasing prices of standard goods and increased expenditures for medical treatments can make it hard to make ends fulfill.
Securing a reverse home mortgage to help with aged care services can give versatility and breathing room for seniors and their families throughout a stressful duration of change. The loan proceeds can also be utilized to supplement retirement income, regardless of the pension level, to cover home care costs not included in the government subsidy.
An aged care loan can also be utilized to fund residential aged care.
4. Realise your dream vacation
After long years of working hard and building your individual wealth, you now have all the time in the world to do anything you want. Why not realize your dream vacation this year? Absolutely nothing might hold you back, except if you don’t have the money to finance your travel and holidays, of course.
Rather than using your pension or investing your personal savings to money your holidays, you can open a percentage of your house equity to gain access to more cash through a reverse mortgage loan.
5. Considerable consumer protection
Reverse home mortgages are probably the most heavily regulated consumer finance product in Australia. As long as you comply with the terms of the loan you are guaranteed to be able to remain in your home as long as you choose (life time occupancy), you can never ever owe more than the value of your sales proceeds of your property (no negative equity guarantee) and you do not have to make a payment until completion of the loan, however are free to do so without penalty at any time.