What is a Reverse Mortgage?

The reverse mortgage or equity release loan is a mortgage that was developed for retirees who are asset rich but cash poor.   Reverse Mortgage or Equity Release loan – what is it? If you are a retiree, a reverse mortgage or equity release loan lets you unlock the equity in your home. It is effectively a loan against the value of your home that gives you either a lump sum payment or regular instalments. No monthly repayments Unlike traditional mortgages, with a reverse mortgage you don’t need to make regular loan repayments. This suits many retirees because they have a reduced income. No need to sell up with a Reverse Mortgage Another advantage of reverse mortgages or equity release loans is that you can access the equity in your home without having to sell up or downsize. You can turn the equity into cash and continue to live in your own home and neighbourhood. When do repayments start? The lender will only seek repayment on a reverse mortgage when you permanently vacate the property. Then the borrower or the estate will repay the lender in a lump sum or from the proceeds of the property’s sale. No Negative Equity Guarantee In seeking a reverse mortgage or equity release loan, look for a lender which has a no negative equity guarantee. This ensures the full repayment won’t exceed the value of the home. It also means you will be able to live in the property for as long as you choose. Seek Specialist Advice Equity release loans or reverse mortgages are specialist products and should be carefully considered. Deal with someone who has been accredited to distribute these products. Diversifi has a specialist located in their North Perth office.