MELBOURNE MORTGAGE FINANCE LENDING UPDATE – 20.08.24

Updated: Mar 19

REASONS FOR ARRANGING A REVERSE MORTGAGE LOAN

There are consistent reasons why over 60s are arranging reverse mortgage loans:

seniors do not want to be forced to sell and relocate if there is a practical alternative
“ageing in place” is preferred to forced relocation
substantial direct and immediate expense of selling and relocation
forced sale of the family home usually involves emotional trauma and loss of friendships
average age of applicants is 72 and many seniors have used up their superannuation funds
cost of living has escalated dramatically and is not covered by pensions and dwindling superannuation funds
essential home renovations need to be completed but cannot be funded
escalating interest rates on existing mortgage debt (after retirement) make ongoing loan repayments very difficult
basic wishes cannot be funded: new vehicle / travel / medical procedures / just having a “Cash Reserve” fund

Reverse mortgage loans can provide a simple, flexible and effective solution to the above difficulties.

Case Study: Elimination of Compulsory Repayments

retired customers with $150,000 mortgage loan balance
compulsory monthly repayments have nearly doubled over 12 months / stress of arrears letters being received
reverse mortgage loan can clear existing debt, eliminate existing repayments and provide a cost-of-living Cash Reserve buffer as well / approved amount $300,000
voluntary interest payments can then be made / no interest is charged on funds held in Cash Reserve

Case Study: Cash Reserve Fund for Future Needs

retired customer has small remaining amount in super / owns home outright / home repairs needed
receives pension, but this is inadequate to fund repairs and cost of living over next ten years
approved amount $200,000: $50,000 for immediate needs and $150,000 Cash Reserve fund

Case Study: Aged Care Reverse Mortgage / Power of Attorney

customer aged 82 needs accommodation in accredited aged care facility / entry cost $500,000
owns residence worth $1.5m / family wishes to retain property rather than sell it
at age 82, customer is eligible to borrow 42% of property value or up to $630,000
son and daughter both act under certified Power of Attorney agreement
approved amount $600,000: $500,000 for access to facility and $100,000 Cash Reserve for future needs

Barry Le Brocq

Melbourne Mortgage Finance (Reverse Mortgage loan specialists)

Patterson Lakes

Mobile 0437417042

(Information is correct as at 03.08.22)