- Only a few lenders offer reverse mortgages
- Should be aware of risks, such as interests and costs liable when the mortgage is discharged
- Interest payable will be added to the loan amount together with the costs after your death
A reverse mortgage is one when no payments are required.
Basically, the payment is made on your death on the sale of your property. It should be noted only a few lenders provide this type of loan
If you are unable to obtain a traditional mortgage whereby you would make monthly repayments (or do not wish to use that method of finance) a reverse may suit you
The lender will value your property to ensure there is equity to cover the loan plus interest and costs so there will be sufficient funds to repay the loan.
The lender will advance the money in terms of a reverse mortgage, and you do not have to make any repayments on the property until it is either sold or on your death. You can make payments if you wish.
You should carefully consider whether this type of finance is suitable for you, and you are aware of the risks
The lender will charge interest and costs on the loan and you will be liable to repay on discharge of the mortgage. The interest may be more than the current interest rates
You are obliged to insure the property and keep it in a good condition
You are obliged to adhere to all the Bank’s requirements set out in the loan document
The interest payable will be added to the loan amount together with the costs after your death
Some reasons why reverse mortgages are used
To renovate your home to make it more accessible if you need a wheelchair
To buy a caravan or travel
To fund a medical procedure
You should not sign any documents without seeking financial and legal advice
If in doubt, don’t use this method – borrow from family.