A Seniors Loan or a Reverse Mortgage can be a real Godsend to those reaching retirement with inadequate superannuation or savings to cover the rest of life, and then discovering that the pension is insufficient to provide for the lifestyle they are accustomed to.
The obvious choice for those with inadequate funds, is to sell their home and downsize. This can be costly. Agency selling fees are typically 2.2% to 3.3% of the selling price. Then there are moving costs, and stamp duty and legal fees on the subsequent purchase, not to mention the emotional cost.
Many want to stay in their home and remain in the area they are used to. They may be daunted by the idea of dispatching many of their loved possessions, packing the rest, and moving to a whole new area, away from their friends and family.
For those who want to stay in their existing home, another option is to take part of the value of their home as a loan, and then use that to enhance their retirement. This is the Seniors Loan, otherwise called a Reverse Mortgage. This option avoids the previously mentioned expenses and at the same time takes advantage of the potential of the greater capital gain on a more expensive property.
Depending on your age, a set percentage of the value of your home can be taken, with no repayments necessary provided one of the owners is living in the home. The interest due on the loan is added to the loan amount with a guarantee that no matter what happens in the housing market, the amount owed can never be more than the value of your home.
This is a way of using whatever value in the home is needed, without selling the home and incurring unnecessary expenses, without disconnecting from the life and social contact you are used to, and taking advantage of a potential greater capital gain.
For more information about a Seniors Loan, contact Sandra Dignam from Every
Loan who will be happy to clarify this option in specific detail.