A mortgage loan which is usually secured for residential property, that enables the borrower to access the financial liberty for the property. The loans are typically promoted to older homeowners and typically do not require monthly mortgage payments.
Reverse Mortgage Overview
A reverse mortgage works as an equity release for senior people when they need Money for:
- Retirement lifestyle
- Accommodation Bonds
- Shared Sale agreements
A way to use the financial arrangements of your property and turn it into a cash lump sum is called Equity Release
There are two kinds of Equity Release by SEQUAL members –
- The Reverse Mortgage
- The Shared Sale Agreement
- A reverse mortgage is a loan against the family home with no repayments. Interest costs are added to the loan, increasing the balance over time. The loan is typically repaid from your estate.Under Federal law introduced in 2012, known as a ‘no negative equity guarantee’, the proceeds from the sale of the home will always be enough to repay the reverse mortgage in full, regardless of how long you live in the home.
- A shared sale agreement is a different form of equity release and is not a loan. The home owner receives a cash lump sum today in return for an agreed share of the proceeds of the sale of the home. Shared sale agreements are also designed to be repaid from the homeowner’s estate.
Reverse mortgages and shared sale agreements are endorsed by SEQUAL because they respect the right of senior homeowners to remain in their home for life. The senior homeowner cannot be forced to sell in any circumstances.