One of the problems Phil Sewell, Partner at Godfreys Laws has seen over his 30 years in practice is that some of our older clients later in life, sometimes run out of money.
Recently Phil’s dealt with two elderly women, both in their late eighties who needed more money for their retirement. They’d been to the bank and the bank wouldn’t touch them. They had both been to their families, but sadly they weren’t in a position to help. Eventually they came across a solution called a reverse mortgage.
How Does A Reverse Mortgage Work?
A reverse mortgage works in the opposite way to the mortgage you might have on your home. You make monthly payments, and over time the principal sum reduces. With a reverse mortgage, no payments are made and instead the principal sum grows. There is no interest paid, and instead it’s tacked onto the loan, so in the fullness of time when the loan is repaid it’s going to be a bigger figure. It’s the reverse of what we’d usually expect from a housing loan.
Why Choose A Reverse Mortgage?
Why would you need a reverse mortgage? Normally because no one else will lend to you. Typically it's for older people who are asset rich but income poor. Sometimes people choose a reverse mortgage because they can’t afford to sell their house and buy another in an area they like.
Our team at Godfreys Law can help by checking that you have gone through all the other options first before looking into a reverse mortgage. We have strong contacts with mortgage brokers, financial planners and in the banking sector, so we can check you’ve fully explored all of the options available to you.
We can also give you some options on arrangements you may be able to make with your family.
How We Can Help
If none of those options work, we can help you go down the path of looking at a reverse mortgage. Recently we’ve had dealings with the New Zealand owned Heartland Bank, and their reverse mortgage product was very fair. The problems that people may have had with reverse mortgages in the past are largely gone.
We have a specialist property law team here at Godfreys Law. We’re all experienced in general conveyancing, and Phil has particular experience with these reverse mortgages. Make sure you have fully checked out all of your options with someone experienced in these matters. Give our team at Godfreys Law a call on 03 366 7469.
Prev Article