A reverse mortgage is a long-term financial commitment. You need to fully understand the terms, including interest rates, repayment conditions, and your responsibilities under the loan agreement.
Since a reverse mortgage loan affects homeownership and equity, legal advice can help ensure how it might effect your estate planning goals.
Having independent legal advice ensures that you are making an informed decision that aligns with your financial and personal needs.
We will conduct a thorough review of your reverse mortgage loan documentation provided to you by your preferred lender.
They will usually comprise a loan agreement, loan terms and conditions, a mortgage form, and a set of mortgage common provisions.
We will undertake a legal advice meeting with you, face-to-face and at a mutually convenient time.
The meeting will be held with you personally, and would ordinarily last between 30 to 45 minutes, depending on the questions you might have, or any issues that may arise.
If there are two borrowers, we will meet with each of you separately and independently.
We will provide any certificates, confirmations or witness any declarations that may be required by your particular lender.
Each reverse mortgage lender has their own processes and requirements to confirm you have obtained legal advice.
Whilst there is no legal or regulatory requirement to obtain legal advice (in most circumstances), increased codes of conduct are in place for reverse mortgages because of the unique features they possess, and the potential vulnerability of the persons who are likely to apply for reverse mortgages.
Our turnaround times are typically from 1 – 3 days but that depends on availability and the completion of all of the preliminary steps required to be completed before we can book an appointment.
The best way to ensure everything is ready to proceed is to follow the steps in our booking portal and upload all of the documents requested.
Your children (or any other person) can assist you with the administrative side of things, such as setting up the technology to meet via videoconference, or making an online booking.
However, they cannot attend the meeting with you whilst we provide our legal advice.
We are not financial advisors or brokers, so cannot provide you with any financial advice or recommendations on the different lenders.
If you’d like to better understand the financial aspects of reverse mortgage borrowing, then a good starting place id the Australian Governments MoneySmart website.
A mortgage form is required by each State and Territory in Australia to formally register an interest on the title of your property.
Depending on your particular State or Territory, you may also need a witness to also sign the mortgage form with you.
Whilst some States and Territories might allow any person (over 18) to witness, we would also suggest you use the services of a Justice of the Peace (JP) to be your witness, as they are familiar with requirements of witnessing.
Each reverse mortgage lender will have their own criteria and assessment of your particular circumstances.
Typically though, if you’re age 60, the most you can borrow is likely to be 15–20% of the value of your home. As a guide, add 1% for each year over 60. So, at 65, the most you can borrow will be about 20–25%. The minimum you can borrow varies, but is typically about $10,000.
Reverse mortgages taken out from 18 September 2012 have negative equity protection, by virtue of the National Credit Code and its Regulations.
This means you can’t end up owing the lender more than your home is worth (market value or equity), at the time the lender is repaid.
In other words, the maximum amount that can be recovered by the lender from you, is the entire sale proceeds of your home (presuming you owe more than that).
Yes. Other options you might consider include:
If you are weighing up your options, it is best speak with a financial advisor to understand your financial circumstances and future needs.