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Reverse Mortgage

Reverse home loans are available in Australia for persons aged 60 and older and are secured by equity in their home, vacation home, or investment property. They can be used for any purpose and do not need repayment for the life of the loan.

In essence, you are not required to repay this type of loan until you sell your house or the last remaining borrower dies. The title to the house will remain in your name, and depending on your circumstances, you might receive your money in a variety of ways.

How does a Reverse Mortgage Work?

A reverse mortgage, like a forward mortgage, is secured by the home. When the homeowner sells his or her home or dies, the proceeds go to the lender to settle the reverse mortgage's principal, interest, mortgage insurance, and fees. Any excess selling revenues go to the homeowner (if still alive) or the homeowner's estate (if the homeowner has died). In rare circumstances, the heirs may elect to pay down the mortgage to maintain the home.

To be eligible for a reverse mortgage in Australia:-

  • The borrower must be over a particular age, usually 60 years old; if there are many borrowers on the mortgage, the youngest borrower must meet the age criteria.
  • The borrower must own the property, or the existing mortgage balance must be low enough that the reverse mortgage proceeds will extinguish it, leaving the reverse mortgage as the only loan secured against the property.

Loan size and cost of reverse mortgages

In Australia, reverse mortgages can be as much as 50% of the property's worth. Several factors influence the actual amount of money available (loan size):

  • The age of the borrower, with a larger sum available at a younger age.
  • Current interest rates.
  • Property worth.
  • The location of the property.
  • Program minimum and maximum; for example, depending on the lender, the loan could be limited to a minimum of $10,000 and a maximum of between $250,000 and $1,000,000.

Loans by Reliiance Financial Solutions

We all have different needs and requirements. Let our knowledge and experience help you get the most suitable financial solution for you. At Reliiance Financial Solutions, we work with you, for you.

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