Yes there are Valid Reasons for Reverse Mortgage that Helps in Retirement Planning – Part II
This piece of blog is in continuation to the one written earlier under the same title and the introduction.
Not just you, everyone have that picture in our mind, the day we stop working anymore and then spend the rest of the days of our lives in peace, travel as much as we want, walk in the sand holding the hands of the one we love and watch the sunset together. However, the reality is quite different from this fascinating tale. Alicia Munnel, director of Retirement Research believes that – “The idea that people can retire at 62 and walk around holding hands on the beach, it’s not realistic.”
Let’s continue to know about the remaining reasons to why reverse mortgage is helpful in retirement planning –
Security against Negative Equity
In Australia, the new government legislation safeguards the homeowners from ending up in debt and owing more than the price value of their home. Since September 2012, reverse mortgage contracts also includes ‘negative equity protection’, which means when your loan term ends, the lender cannot hold you liable if the sale price exceeds your actual accumulated debt and if the sale exceeds the amount you owed to the lender, you will receive that extra amount of money.
Freedom to Borrow, Freedom to Draw
This one is an ultimate advantage of reverse mortgage that provides full control to how much you want to borrow and how much you want to draw. Many times, reverse mortgage lenders will allow you with the option to set a ‘limit’ of funds available, which you can access as you want. Due to this, you will have a significant amount of money always available, however, by limiting the amount you use now can ensure less impact on your future financial position.
To know more in detail or to discuss your individual needs talk to the Australian mortgage brokers at Loans Direct. Book your free no obligation consultation with the one by visiting the website.