Types of Reverse Mortgages

• Standard reverse mortgage: Receive a lump sum, regular advance, or apply for a cash reserve using your home equity.
• Secondary property option: Use a residential property other than your home to secure the loan.
• Aged care option: Release your home equity while living in an aged care facility, with a maximum loan term of five years.

Receiving Drawdown Payments

• Initial lump sum: Ideal for repaying an existing mortgage, medical expenses, home renovations, buying a new car, or going on a holiday.
• Regular advances: Supplement retirement income with monthly, quarterly, or annual payments for up to ten years.
• Cash reserve: Apply for funds in case of an emergency or unexpected expenses.

Repaying the Loan

• No early repayment fees; repayments are optional and can be made at any time.
• The total loan amount, including accumulated interest, is usually repayable when the last customer moves permanently from their home.
• No penalty fees on discharge of the loan, but a mortgage discharge fee will be added to the loan balance on discharge.

Impact on Pension

• Accessing home equity usually does not impact Government entitlements, but it depends on individual financial situations and assets. Contact Centrelink for personalized advice.

Home Ownership

• You will always own your home and continue to live in it as long as you wish, while benefiting from any capital growth.
• If you move into another house, you can apply to transfer your reverse mortgage to your new home.

Additional Loans and Uses of Funds

• When your cash reserve is fully drawn, you can apply to increase your total loan amount based on current loan approval criteria.
• Funds can be used for home repairs, debt repayment, travel, medical procedures, upgrading to a more reliable car, in-home care, or other uses to make life easier and more comfortable.

Aged Care and Future Needs

• Moving into aged care can be expensive and stressful. You may be able to vary your reverse mortgage to an Aged Care Option.
• Consider future needs and objectives, such as ongoing living expenses, aged care costs, medical expenses, and plans to leave funds to beneficiaries.

Eligibility and Loan Amount

• At least one customer must be aged 60 or over, with a maximum of two customers able to apply under one loan.
• The minimum property value considered is $200,000, and loans cannot be secured against properties in retirement villages.
• The maximum loan amount is calculated by applying a loan to value ratio (LVR) based on the age of the youngest customer applying for the loan.

Borrower Protection

• Subject to complying with the lender’s terms and conditions, you will not owe more than the net sale proceeds of your home.
• You can live in your home for as long as you choose and retain ownership of your home at all times.
• The amount required to repay the loan will never exceed the net sale proceeds of the property.

Equity Protection Option

• You may choose to protect a percentage of the eventual net sale proceeds of your home (up to 50%).
• When your loan is repaid, you or your estate are guaranteed to receive that protected percentage, even if the balance on your loan is higher than this amount.

Portability and Loan Increases

• The loan may be transferred to a new property, provided it meets the lender’s current terms and conditions.
• Once the loan is drawn in full, customers may request an additional loan based on a new property valuation and current LVR.

Property purchasing costs

• Minimum of 5% deposit
• Stamp duty
• Property title transfer fee
• Registration fees
• Conveyancing fees
• Inspections including building/strata and pest
• Home loan set up fees
• Lenders Mortgage Insurance (LMI)

Property selling costs

• Agent Fees
• Marketing Costs
• Conveyancing Fees
• Capital Gains Tax (CGT)
• Presale Repairs and Renovations
• Styling/ Home Staging
• Auctioneer’s Fees
• Lender Fees
• Moving Costs