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 [email protected]
Darren
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Darren please tell me how long after purchasing your property can you apply for reverse mortgage and iit could affect pensions that you receive from the UK
No time limit Jill – any time after purchase is fine. You will need to check with UK pension office yourself to see if it will have an impact on pension. Contact me directly here for more details: [email protected]
Our home value is approx 480k. It has a drawdown type mortgage balance of 56k. Can I reverse mortgage this or, is it better to keep going and let the interest accumulate on the mortgage?