Reverse Mortgages NSW: Loan Scenario of the Week

Florence, aged 80, has lived in her home on Sydney’s Eastern Suburbs for 43 years. She wants to remain in her home as long as possible. It has memories of her children growing up and her husband who extensively renovated the property.

Florence wants funds to renovate her kitchen and paint the dining room. She then wants to have funds available as a credit line for unexpected costs in the future. She walks and swims almost every day but, she is concerned about having funds for in home care as she ages in her home. She may also help one of her children financially as her son has just been through a divorce and is renting with 3 children.

Florence is a self-funded retiree who receives $4,500 per month from her superannuation. She has money in her superannuation fund but does not want to draw it out as this will reduce her income which coming from her Superannuation is very tax effective.

If she does decide to assist her son there are no Centrelink implications. Florence’s accountant has compared the costs of the reverse mortgage as opposed to the costs of taking funds from her superannuation and has found the reverse mortgage to be the best option.

Doing the reverse mortgage will allow Florence to meet her objective of aging in her home and gives her the ability to consider choices that would otherwise not be possible. The initial LVR of the facility limit will be well below 10% so if her expenses increased to more than her Superannuation income there is a large amount of equity that could be accessed.

The loan is not for regular ongoing expenses. The borrower does feel she wants to age in her home and so funds in the future may be used for this. This loan has allowed Florence to continue living in the manner she wishes whilst maintaining her super.

If you would like to know more about how a Reverse Mortgage can help you achieve your lifestyle aspirations please call Raymond on 0438 184 784 or Nicholas on 0438 184 785.

(Names, locations, amounts, & other personal details have been changed to protect the client’s identity. This post does not constitute advice.)

Reverse Mortgages NSW: Loan Scenario of the Week (03/05/2024)

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