What is a Seniors Reverse Mortgage And Why It's Good to Get One
When people get close to the age of retirement, they begin thinking about the time they will spend as a senior citizen. Very soon, they realize the pension money they'll get is not enough for the way they would like to live their life. Some think that since they worked their whole life, it is time to do some of the things they dreamed of for years. Both situations require more money that they would eventually get from the retirement fund.
That's where the seniors reverse mortgage plan comes into play. The seniors reverse mortgage is actually a loan from a bank, but under a specially designed plan that fit seniors. The loan is offered to people over the age of 60 or 65 in some banks. It is a loan by which the senior citizen is not obligated to return a single dime until the end of their life.
Some will ask how is this possible, right? Banks are profitable organizations, they're not charity. It's true, but this kind of loan is great for seniors because it is directly related to the property the loaner has. The bank that the senior citizen will make the deal will provide a lump sum and in return will get an equity of the shares of the property the citizen has. Most often it is a house but mortgage can be placed on other assets too. If the citizen doesn't prefer lump sum, they can arrange a monthly payment just like when they used to get a salary for their work.
The bank will get a return of the money only after the death of the person that asked for the loan, or after everyone that lives in the house that has a mortgage die. If the house is sold and everyone is still alive, then the bank will collect the loan from the sales deal. The good part is that the sum of the loan can never become a debt. The Australian Government regulates this part and the bank can only charge as much as the property is sold. Of course, if the amount of the sale is bigger and there's still money left for both the bank and the citizen that asked for a loan, then they split shares.
This is a perfect option for people that don't like to become bored and feel like their life has ended just because they are getting retired. Many people ask for this kind of loan because they need money to make investments and they don't have enough capital. Others use it to buy a house somewhere on an ocean island and spend the rest of their life fishing and enjoying the sun. It's really up to the person that's getting retired, but it is no question that the seniors reverse mortgage program is probably the best option for senior citizens or people that have just retired and would like to continue living like they used to.