Mary and her husband Ian live in their unencumbered home in the Sutherland Shire.
They are looking to do a Reverse Mortgage as they need to replace their motor vehicles it is old and costing a lot in maintenance. Their air conditioning unit has also broken, and they need funds to replace it. The house needs some minor cosmetic repairs, and they would like some funds to continue to maintain their property.
They are comfortable living on the aged pension but want to have funds for one off expenses and discretionary costs in the future. The wish to take out a Reverse Mortgage of $110,000 to spend $30,000 on a car, $20,000 on the aircon and minor repairs and then a cash Reserve of $60,000 for one off expenses.
The loan is not for regular ongoing income or expense support. If they needed too they could increase the limit of their loan substantially in the future. This loan is so small that the property is likely to appreciate faster than the interest will accrue, especially as clients are only charged interest on what they have drawn down not the whole facility.
(Names, locations, amounts, & other personal details have been changed to protect the client’s identity.)