Questions  &  Answers

Frequently asked  questions on Seniors Finance Australia  Reverse Mortgage / Home Equity Release Loans –  if you have any other queries after reading the following then  please call us on 1300 881 807

What is a reverse mortgage /home equity release loan ?
It is a special type of loan that  allows you to use the equity or assets value that you have built up in your home and to be able to turn this equity into cash to use for whatever reason you want – i.e. holiday, living expenses, new car, renovations, help your family, health costs

Who can qualify ?
If you own your own home , holiday home or investment property and you are over 60 years of age then you would qualifier for a reverse mortgage.

What happens to the Title of my home ?
The Title of you home will stay in your name.

Do I have to make any repayment on  the loan ?
No,  you do not have to make any repayments on the life of this loan

Can I make voluntary payments ?
Yes,  you can make  voluntary repayment if you wish to do this.

When does this loan have to be repaid ?
It is a “lifetime loan”.   The loan will be repaid when you choose to sell your home yourself,  or when the last surviving borrower passes away.
 
How much can I borrow ?
The amount you can borrow depends on the age of the youngest borrow against the valuation of  your  property .   As the age of the youngest borrower increases you can also “top-up” the loan ( borrow more money).  The loan percentage on the value of the property starts at 15% at the age of 60 years and increase with age until it reached 50% at age  95.  The value of the property  generally increases over this period of time as well.

What  if  I have a mortgage on the property at the moment –
If the amount you presently owe on a mortgage is less than what you can borrow then this present mortgage would be paid out for you as part of the reverse mortgage.

Do I always have to be living in my home ?
No, if your were sick and had to move in with your family or into a nursing home, or even go traveling for a few years  you can choose to have your family look after your home or even rent the home out.  This is your choice.

How can I default on a reverse mortgage  ?
As this is a “lifetime loan with no repayments” you may think how can I default ?
It is part of the loan agreement that you keep insurance on the home and if you did not do this then it would mean the loan could go into default.

Will a reverse mortgage effect my pension ?
This will depend on your circumstances and what you require the money for or when you intend to use the money.  In general terms, if you are on full pension and have little or no other income or assets and  are requiring the money to say buy a car, do some renovation, go for a holiday, spend the money for personal reasons then it does not generally  affect your pension but we do ask that you seek advice from the Centrelink on your personal situation when going into a reverse mortgage.

Why do I need a lawyer ?
It is a  requirement that after the loan is approved and you receive your reverse mortgage/equity release documents that you take these to your lawyer for independent legal advice so that they can explain to you what the documents are about, answer any legal  questions on these documents  that you may have so that you are comfortable and understand this mortgage agreement as this is a lifetime loan.

Do I have a choice on variable or fixed rates ?
Yes, you do.  You can choose variable rate options or fixed rates or fixed for Life .  ( please check with us to see what suits your situation the best )

Can I pay the loan back ?
You can make voluntary partial or full repayment of the loan whenever you wish.

Does it cost me anything to pay the loan back ?
There are No fees if the loan is paid back for health reasons or if you have to move into a retirement home or village.
(If the loan is in a fixed rate period then you may have a small fee to break this fixed rate period.  If you are have chosen a variable rate then there would be no break costs - these details will be in your legal mortgage documents according to what type loan you choose)

What does a No Negative Equity Pledge mean ?
The No negative Equity Pledge ensures that you (or your estate)  will not have to pay any shortfall difference between the sale price of your home and the outstanding balance owed when the home is sold. (see your contract) 
If you kept borrowing as you aged and lived for a very long time and for some reason the loan was greater than the sale price of the property it means that you, or your estate never have to pay back more than the sale price of the property.

Can I have a "Flexible re-draw"  or a "Cash Reserve" facility put  in place ?   Yes, you can have this option - this is where you can choose to take your maximum amount as your limit and then draw down the amount that you require, when you require it.   Interest is only charged on the amount that you actually use.  You can also have options of a Lump sum, monthly payments and any balance left in a redraw.  These types of loans can also have fixed or variable rates.

I have my home on a Rural acres property, do you lend on this ?   Yes, you can have an equity release / reverse mortgage if this is your own home on acreage. This depends on postcode and can be looked at on a case by case basis.

The home that I live in is owned by my Family Trust / Company, can I have an equity release ?    Yes, there is a loan that assist you here, postcodes do apply - please ask for further information. 

I have some pension income but require more income to meet my expenses, can I have monthly payments and will it effect my pension or not  ?   Yes , you can have an equity release loan with  monthy payments, say if you needed an extra $600 per month, in general terms as this is coming from  your exempt asset via your own home - paid to monthly then it is not taken into account for Pension or Social Security Income -  it is used by  some self-funded retirees access income. You can check this with  your Centrelink officer.

As I get Older and I need more money, can  I do this ? -  The equity release / reverse mortgage loan is on age and property valuation. As your home increases in value , or  as the youngest borrow get older  you can increase the size of the loan.

To Download an Application Assessment Form click here 

If you have any further questions please email or call our office on

1300 881 807