If you’re a homeowner aged 60 and over, a reverse mortgage is one way that you may be able to leverage the equity in your home to access extra cash.
We have broken down the basics on what you need to know before considering a reverse mortgage:
What is Equity Release/Reverse Mortgage?
Equity Release, or Reverse Mortgage, allows you to borrow money using the existing equity in your home as security. The loan can be taken as a lump sum, a regular income stream, or both. You stay in your home and don't have to make repayments while living there.
You repay the loan in full, including interest and fees when a trigger event occurs:
If you're age 60 or over, own your home and need to access money, releasing equity from your home may be an option.
Our Eziway Loans specialist can help you determine if an Equity Release is the right loan for you by considering your financial and personal circumstances.
Some lenders may pay you a lump sum at the start of your loan. Policies between lenders vary, but some have a minimum draw down for this option of $10,000.
This option is ideal for home renovation, new car purchase, holiday or maybe even debt consolidation.
On top of the lump sum, you can receive an additional payment through the other available options.
With different options available, you can set a regular drawdown payment (monthly, quarterly, yearly)
Receiving regular income frees you up to enjoy more that life has to offer. This is ideal if you are planning to draw on your loan gradually to supplement your retirement income.
A cash reserve allows you to unlock your home equity to set up for when you need access to funds most. This is highly flexible, allowing you complete control over when to access the funds.
Depending on the lender policies, there may be no minimum drawdown on a cash reserve facility, with some lenders allowancing you access to the money by debit card at ATM’s.