Reverse mortgage advice

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When establishing a reverse mortgage loan through a reputable lender or broker such as Seniors First, it will quickly become apparent that other advisers also have an important role to play. Although your SEQUAL accredited broker will manage the application process for you, depending on your circumstances and choice of lender, you will also need to consult with one or more of the following:

•    Legal adviser /solicitor

Once the loan is approved and contracts are printed you will need to obtain independent legal advice to confirm you understand the terms of the reverse mortgage contract you are signing. This is a mandatory requirement of all SEQUAL lenders, and is perhaps the strongest consumer safeguard. 

• Centrelink Financial Information Services (FIS) officer

If you are receiving any aged pension (or even if you might be in the future), you should consult with a Centrelink FIS officer before you draw any reverse mortgage loan funds. They cannot provide ‘financial advice’, but their role is to provide information on pension entitlements, and in particular the impact a reverse mortgage loan may or may not have on pension levels. Although in many cases there is no impact, this is nevertheless an important check.

• Financial adviser

Many lenders require that you also seek financial advice from a qualified financial planner as part of the final loan approval. This is to ensure that you have considered other alternatives such as downsizing and that you fully understand how capitalising and compound interest works.  

A good reverse mortgage broker will encourage you to consult widely from these (and other) stakeholders. At Seniors First, we also spend a lot of time educating clients on how to minimise reverse mortgage interest and fees.

Feel free to contact me directly with any queries at info@seniorsfirst.com.au

Darren