Reverse Mortgages
Reverse Mortgages are becoming more and more popular as retirees are living longer and some have not been able to provide enough income to live comfortably.
Designed specifically for Seniors and Retirees
They work simply by borrowing an amount against the family home and instead of making payments on the borrowed amount, the interest is capitalised (added on to the loan amount). The amount that can be borrowed against the house depends on the age of the retirees. For example if the younger of the couple is 70 years old, approximately 20% of the house value can be borrowed. If the younger age was 75, the amount can increase to 25%.
By having the borrowed percentage this low, it becomes impossible to use up all the equity in the home, especially when you consider the increase in property value over the years. This way there is always equity in the house to be passed on as an inheritance. The interest rates can be variable or fixed and additional payments can be made if so desired.
How is the loan repaid and what can I use the money for?
Reverse mortgages are available for singles and couples and when the house owner becomes deceased the home is sold, the loan is paid back and the balance goes in to trust to be distributed amongst the beneficiaries. People are using reverse mortgages to fund investments or holidays or to assist in bill paying. The industry is huge in the UK and is predicted to grow rapidly in Australia over the next few years.
Call APO Finance today to discuss all your lending and refinancing requirements - 07 3387 2200
