Today, Household Capital, Heartland and some smaller lenders provide reverse mortgages. A reverse mortgage allows you to borrow money using your home equity as collateral. That's why reverse mortgages could be a useful option for older homeowners and retirees who want access to an easily usable source of funds, but don't want to sell or completely give up ownership of their homes. The possibility of reverse mortgage loans getting out of hand can become a problem, especially if customers rely entirely on loans as their only real source of extra money.
Several lenders resurfaced to be active with new loans, and there are rumors that other lenders will soon offer exciting new reverse mortgage loans for pensioners and retirees. That said, reverse mortgages are not risk-free and anyone who wants to access the burden-free value of their home should have a good understanding of the basics. At the lowest point of the cycle, only four banks remained viable reverse mortgage options for the Australian senior. Although Commonwealth Bank (CBA), St George and Bankwest continue to serve existing borrowers, they all stop offering new reverse mortgage loans.
In response to the “toxic sales culture” of reverse mortgage lenders, the Australian government began to introduce stricter regulation around reverse mortgage lenders. However, there are still several banks that offer reverse mortgages, including G%26C Mutual Bank, Heritage Bank, IMB Bank and P%26N Bank, to name a few, as well as other specialized lenders such as Heartland Seniors Finance. If you are interested in learning more about G%26C Mutual Bank's reverse mortgage products, you can visit their website. As described above, a reverse mortgage is essentially a form of loan that homeowners (usually 60 years of age or older) can apply for using their own homes as collateral.
When St George Bank took over Advance Bank in 1998, it inherited its reverse mortgage loan product and since then became the Senior Access Mortgage Loan they continue to offer today. The new reverse mortgage program will be open to all age-eligible pensioners in Australia, including those who have self-financed their retirements, according to the publication. To give you a better idea of your borrowing capacity and the impact a loan will have on your equity over time, check out ASIC's Moneysmart reverse mortgage calculator. And if you plan to leave your property to your children, understand that taking out a reverse mortgage could substantially reduce your inheritance.
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