What is a Reverse Mortgage?
A reverse mortgage can be a great way to create an income stream by borrowing money using the equity of your own home as security. This type of loan can be taken as a lump sum, regular income stream, line of credit or a combination of these options.
Interest is charged the same way as other loans, except that while you live in your home you don’t have to make repayments. The interest compounds over time and is added to your loan balance. You’re still the owner of your house and can continue living in it through the course of the loan.
The loan needs to be repaid including interest and fees when you sell or move out of your home or, alternatively move into aged care, or die.
Because no income is required to qualify for a Reverse Mortgage, credit providers are required by law to lend you money responsibly. This means that not everyone will be able to obtain this type of loan. Get in touch to find out more.
You can also find more information about Reverse Mortgages at www.moneysmart.gov.au