Unlocking the capital in your home

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Do you need a retirement specialist in your life? And what exactly do they do? In today’s podcast Esther Agrisano from Household Capital explains how she assists older Australians to  explore the ways in which they can unlock the capital in their homes to make life a little easier, right now.

And her client, Sarah, explains why she accessed this type of loan, how she has used the money and why this has given her a cost-effective solution to fund her new lifestage of less work and more play.

What are you doing with your Household Capital? To learn more, go to www.householdcapital.com.au or call 1300 040 743.

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Total Comments: 15
  1. 0

    Be very careful when considering any form of reverse mortgage. My mother used a reverse mortgage to access funds that she didn’t really need – she had dementia at the time, but refused to allow any family members to assist her in any way. The combination of an unprincipled, unscrupulous financial adviser, together with a lender not really having my mother’s interests in mind, meant that she lost 40% of the value of her home in 3 years. There were other solutions to her problems but this industry, at the time, was high pressure and very profitable for the lenders, making it so easy to confuse people like my mother. Beware! And beware those financial advisers who are still advocating reverse mortgages as the preferred solution to a steady cash flow.

    • 0

      Right on Buggsie, there is no reason for a govt scheme to be handed over to the banking industry so they can charge compound interest on a govt funded loan.

      It is the compounding, the charging of the interest on the interest, often daily, that causes these loans to be a disaster for folk who try it.

      You have to wonder why the govt starts schemes that they know will rip-off the so called beneficiaries..

    • 0

      Yes, another scheme to take money off the average Joe and give it to the wealthy. No wonder the banks support the politicians. It’s a right circular deal and the one that loses every time is Joe Public.

    • 0

      The Govt is interested in people not living in self imposed poverty. Some of us spend more on upgrading the house than on personal items just to make sure they are on the FULL pension. I am quite happy having a part pension with the health card, never really caring to get the maximum.

    • 0

      You are correct Buggsie, Reverse Mortgage is the worst and the last resort to access funds. In doing so you lose big time. However, depending on how much you borrow. with strict budgeting you may be able to pay off the mortgage and regain full equity in you residential home but the overall cost will be very high. It’s people who do not plan to repay the mortgage that end up losing majority of their equity to the financiers. The best part is that the borrower can’t be forced out of their home until they pass away then the vulchers flock in for their kilo of monetary flesh. Anyone contemplating Reverse Mortgage must see a good independent solicitor to scrutinise the mortgage agreement and receive legal advice. Don’t trust the finance advisors, don’t use the lender’s solicitor for advice because in both cases there will be a conflict of interest.

  2. 0

    Absolutely right Buggsie. This type of access to funds should be the very last resort especially for the elderly. Intense research needed before committing to these types of products.

  3. 0

    Haven’t experienced a reverse mortgage (& never will) but would seem no different to a legalized scam to me! Who wants to die/leave debt to other family members/kids? Pretty crappy way to go I would think. Loans are ok if you are young & have th ed means to repay/fund them (ie still working & intend to keep working for as long as it takes to pay it off, otherwise why would you do it)?? Why should YLC promote such a thing is beyond me!

    • 0

      Advertisers pay the money to run the site Cheezil61, same as Challenger comes up now and then. Retirement places, retirement cheap overseas etc. Just read what you want to read and think your own thoughts. I might take out a loan from my intended beneficiary since he/she is getting my estate later on. But only if I really needed it.

  4. 0

    Esther is a representative of a reverse mortgage lender.

    Don’t know how you can be called a “retirement specialist” if you do not include age pension and aged care discussion???????

  5. 0

    Its disappointing to see reverse mortgages spruiked on this site. Everything I have heard, even without putting much effort into it, is disasterous. If I want to free up finances and there were no other sources available then I would look into selling my home and buying something I could afford, and also compare it with renting.

  6. 0

    Let’s say 10 years ago I took out a reverse mortgage on my home that was valued at $500,000.

    It is now valued at $800-820K.

    I took a $10,000 lump sum and $500 per month for the 10 years. Does that mean I have lost all the equity in my home – absolutely not

    I now owe $117,000, BUT my new net equity is $697,000.

    So for the past 10 years, I have used $117,000 of the $300,-320K increase value in my home.

    If I had downsized to a unit valued at $400,000, and used $70,000 of the $100,000 net proceeds, I would have been left with a unit valued at $512,000 and $30,000 at the bank.

    What was the better option. It is so easy to see the wrong perceptions from many of the commentary on this subject.

    Will I still leaved a significant inheritance – YES

    Will I still have enough equity for aged care – YES, based on today’s room accommodation of $550,000, I have enough equity for 32 years of residential care.

    Next time YLC wants to run a story from/on behalf of advertisers on this subject, it should be prepared to supply facts and then we won’t get these uninformed comments

    • 0

      Thank you Tams for your detailed explanation. Too many people focus on the negative aspects of reverse mortgages.
      They don’t take into account that in most cases, properties do appreciate, and in so doing, this covers the interest that has been charged.
      If a person wishes to stay in their home, be free of money worries, this is a way to do it. They do not have to repay the loan until they leave the home and in the meantime, do not have the worry of compulsory repayments. If able, it is a good idea to pay the interest component however, it is not compulsory.
      If the Government would pay a live able aged pension, in particular to single people, many would not have the need to resort to reverse mortgages.

    • 0

      Millie – yes you are right in many cases the property value goes up but you are also obligated to keep your house in top condition as you are no longer the sole owner. You will also have adequate insurance where as the sole owner you can do what you like. If the value goes up you at least are winning something back. In my case I’d be on my ear after 10 years with the money left maybe enough for a van on one of those permanent sites.

  7. 0

    I agree with all these comments and surprised YLF is supporting this crowd. We went with the other option a couple of years ago which is not a loan and so glad we didn’t go down this path. reverse mortgages scared the hell out of us. Too much interest!! Paid off a large loan and now we have no loans. Our kids were just pleased that we didn’t need to sell and could stop working. Consider ourselves pretty lucky now.

  8. 0

    It is so interesting that major banks and most minor banks do not do reverse mortgages.
    So we are mostly left with the bottom feeding loan sharks.
    Be AFRAID, Be very AFRAID.



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