Q&A: Unlocking the capital in your home

YourLifeChoices podcast co-hosts John Deeks and Kaye Fallick speak with Retirement Solutions Specialist, Esther Angrisano, from our premium partners, Household Capital. We will also hear from one of Esther’s clients, Sarah who will speak about her experience with Household Capital.

Esther, we would love to hear about your role at Household Capital and what a retirement specialist actually does?
Esther:  As a retirement specialist, I work with clients who are over the age of 60 (who own their own home) to assist them with funding their retirement and to be able to live well at home. I understand that this can be an overwhelming experience. My role really is to guide them through it. A key aspect of my role includes assisting a client from the very first inquiry, right through to settlement and then to annual review. We offer a personalized and an individualized service so that our clients can feel assured and supported every step of the way.

When you say clients who own their own home, but for those of us who still have a mortgage, could I be a client of yours?
Esther: You certainly could be. We can help a lot of clients refinance an existing mortgage that they might have today.

What about if I have no home, but I have investments and I’m over the age of 60. Are you the kind of person I should be speaking to as well Esther?
Esther: If you have an investment property, John, we can certainly help you with that as well. You could essentially be using the equity in your investment property to help fund your retirement.

What are the main reasons that people access capital in their homes?
That’s a great question because it’s one of the aspects I enjoy most about my role at Household Capital. Every inquiry is unique and there’s a wide range of purposes why clients would contact us. We’ve already touched on refinancing an existing mortgage. We also assist with consolidating personal debt, renovations and aged modifications to the home. People who might have a need for medical expenses to be paid and that would include in home care and aged care. Sometimes we see clients helping children and grandchildren with their first home deposit or education fees. So basically, for some clients, it’s just one of those needs, in other cases it might be a mix and they can tick off a number of things that they need

Is part of excessing equity in your home, is the contract set up that you are actually required to talk to a lawyer or a financial advisor?
Esther: That’s right. We do require all of our clients to seek independent legal advice, not necessarily financial planning, that’s only in the case where you might be borrowing funds to invest into something (such as superannuation). But all our clients would be required to see a solicitor.

So, there’s a checks and balances obviously in the contract. And have you seen an uptake in a need for such an access during the pandemic?
Esther: we all know Covid has impacted every aspect of our lives and our clients really are no different. Household Capital has been there to help seniors respond to these challenges, sadly, some of those clients have been forced to stop working, and still have a mortgage. Many thought that their only option was to sell their home to repay the debt. So, we’ve been helping clients refinance so that they can stay in the home that they love. We touched on that earlier.  A few other clients had their only source of income from their investment property and in many cases, the rental income has halved or even ceased all together due to Covid. We’ve had clients who drive Uber for some extra income and that’s certainly ceased. So, I’m really proud to say that Household Capital has been there to provide for their very livelihood. One last example, I’ve also found with our clients like the rest of it staying at home) they’ve been using their home equity for home renovation. So, all the repairs and

Esther, you’ve got one of your clients with you, Sarah. Sarah why did you wish to access this form of a loan? How did it come about?
Sarah: I’m still working and while I’m working it wasn’t an issue because I had a very small mortgage.  But then my daughter and her partner decided to move in with me three years ago and that’s actually working really well. I was always going to (when I stop work) to sell my house and buy a smaller place and have a lot of money in the bank for retirement.

And now I feel that if my daughter wants to live with me, I’m very happy for them to stay here, so that why I decided to use the equity in my home. I initially decided to take it out, keep working, but have it as security, if anything happened, (I got ill or I wanted to stop working), I would still have some income. Then Covid came along. I’m in recruitment and it became pretty obvious that I wasn’t going to be busy for a while. Even though I haven’t really had to access it yet, apart from paying, taking care of my mortgage, I’ve just found it’s really given me an incredible sense of relief, knowing that I can just wait for the work to come back, at the same time, keep my lifestyle. And, I realized that not working and having the benefit of having an income if I wanted it has just given me an incredible sense of security and made me think differently about the path I want to take. I’ve always been focused on earning money and not think, well, I actually really love gardening, or I want to go write a book or I want to paint. So, from that point of view, I know I can really do, even though I will continue to work, I can just really do whatever I want to do. Absolute freedom!

Also, I’m an ex-tax accountant. And when I actually looked at the numbers, you know, sell my house and buy again. The cost would have been well over $200,000. If I keep my house (and I don’t have a lot of money sitting in the bank), I can access the pension, which over 10 years, is another $200,000. So, from the point of view of having assets to leave my children, I feel by staying in my own home, they will actually benefit financially and with a small increase in the value of the home will actually take care of the interest component. And I’ll be pretty much leaving them the amount of money I would leave them if I wasn’t here tomorrow.

What was it about Household Capital that you felt were the right fit for you?
I’ve been in sales and people buy from someone they trust. And I must admit from the moment I met Esther, I trusted her, but I obviously still did my research. Esther was willing to meet with my accountant and my accountant was initially not quite sure about it, but after listening to Esther and looking at it, he said “I didn’t know anything about this. I think it’s a fantastic idea”.  So, my accountant approved it. There were other options, but mostly they want equity in your home and Household Capital don’t do that. You always own your own home. You always have the right to sell whenever you want. You have a 12-month period if you die and your family has a 12-month period to either pay the house off or sell it and take the proceeds. Really, to me, it ticked every box. It was always very smooth, I never felt oversold. Household Capital don’t take commissions so it’s not like going to a financial advisor where you can see the dollar signs in their eyes, and they just want to sell their investments to make money. Esther was always been incredibly patient, and it just went smoothly.

It sounds like a really successful process, Sarah. So, we really appreciate your time. It’s not often someone can come on and talk so frankly. Esther, how can people get in touch with you at a Household Capital?
Esther: If you think Household Capital could assist you, I’d really encourage you to pick up the phone and make an appointment to speak with me or one of my colleagues and discuss, how you can use your household capital to ensure they live well at home, You can call us on 1-300-622-100.

What are you doing with your household capital? To learn more, go to householdcapital.com.au or call 1-300-040-743.

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