More bad news for seniors unfortunately. As if recent huge drops in the values of share portfolios and super funds owned by Australia seniors was not enough, reverse mortgage lending has now has also begun to feel the pinch. Last week reverse mortgage funds got harder to obtain for many people with the news that several prominent reverse mortgage lenders have significantly tightened credit policy.
This will particularly impact those senior borrowers aged 60-70 years, with some revers mortgage lenders now only advancing 10% of the home value for sixty year old seniors borrowers (compared to 15% previously). Although these changes are limited to only a few reverse mortgage banks at the moment, others are likely to follow soon with similar announcements.
As a result of the changes, an Australian senior aged 65 with a home value of $350,000, would have the total amount they could borrow reduced by $17,500.
If you are under 75 and thinking about accessing some of the equity in your home with a reverse mortgage loan, you should perhaps consider moving quickly before too many other lenders also tighten their credit policy.