If you're around those senior days or you're about to get retired, you probably already heard about those magic words everyone is talking about - reverse mortgage. If you already know what is it, in this article you can read about how to get a reverse mortgage. If you don't, you can also read about what it really is.
So let's start with the basic - what's a reverse mortgage? It is a plan in which seniors get a loan from a bank and don't have to return a single dollar ever. The only thing they are obligated to is to have a property on their name and be senior citizens. Some banks approve the reverse mortgage plan to seniors over the age of 60, some over the age of 65, but that's basically the limit - senior citizens.
Where's the catch, right? There's no catch, the house or the property both the senior and the bank agree on will have a mortgage once they both sign the agreement. In the agreement, both parties will sign that the bank gets a share of the equity of the property. After the person signing the deal passes away, the bank will get their shares. If the person decides to sell the property, the bank will get their shares after the property is sold.
That's it. So how to get a reverse mortgage? Simple. You get into a bank, ask for one, and the person in charge will prepare all the papers needed. you need to have your ID and some proof of the property you own and you're prepared to sign for. All other details will be provided by the bank.
This is a great deal for people that need a lump sum of money that they need for traveling or enjoying their senior days like they always dreamed of. Some people choose the reverse mortgage to fill the money gap that creates after they finish the working days and become retired. Whatever the reason is, there's no better option for getting money when you're a senior.
Some people can't stand the fact being retired and they choose to continue working. Some even harder than they used to. They choose to finally chase their dreams and start that company they used to dream about as younger. However, starting a new company sometimes need a lot of money and this is a great way to get enough capital for beginning the project.
The most important thing you need to know how to get a reverse mortgage is that the amount of the rates that the bank receives over the years can never exceed the value of the property. The Australian Government regulates this part and it will certainly be in the contract that you're going to sign.
This means that even if you die, your relatives can never owe your money to the bank. The only problem can be if you decide to sell the property after 30 or 40 years, and the rates are so high, that there will be no shares of it left for you. But, that's a long time after you get your senior status, so enjoy.