There has been a lot in the news recently about “mortgage stress” affecting families and younger borrowers. However, it now seems to be increasingly affecting older borrowers also. At Seniors First we’ve noticed a recent surge in enquiries from seniors who are looking to refinance their residual home loan and/or credit card debt into a reverse mortgage so that monthly repayments are no longer required.
This can be a good solution for improving monthly cash flow, however in some cases it will not be possible. If the proportion of your existing debt too high, the reverse mortgage lenders’ rules will not allow sufficient funds to refinance (the amount you are eligible for is determined by your age and the value of the property).
This news was picked up by the Sunday Telegraph in Sydney and published on March 9th, 2008. The article is a good one, and you can read it here
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With the way interest rates are rising, this will only get worse.