What documents are needed for Reverse Mortgage Loan Advice?
Whilst each lender is different in terms of the extent of the documents they might issue you. There are some basic documents that will likely be involved in all Reverse Mortgage Loans.
- Loan Offer or Agreement
- This is the fundamental documents that sets out your specific loan or facility being offered to you.
- It should align with the sort of loan facility you have applied for.
- If it is a ‘lump sum’ loan agreement, it will state the loan amount you will receive on settlement of the loan.
- If a ‘line of credit’ it will state the amount of money that could be available to you in the future to drawn down on.
- If you applied for a regular advance of money, it should state the amount you will receive and the frequency of payments.
- Of course, it should also state the Interest rate percentage (per annum) that will be charged on the money you lend.
- It will also contain any particular special terms or conditions that relate to your specific loan.
- General Terms & Conditions
- These are the standard terms and conditions that will apply to the loan being offered to you.
- They are referred to as ‘general’ because they will generally apply to all loans offered by the lender, and are standardised across their borrowers.
- Any special conditions (which might prevail over the general conditions) will be contained in your specific loan offer or agreement.
- Mortgage Form
- This is a standard proforma document usually referred as a Form 1.5) that will be prepared by the lender.
- The Mortgage Form will identify you (as the owner and Mortgagor), the land you own (as a lot and plan number), and the lender (as the Mortgagee).
- Sometimes, the Mortgage Form will include some additional details to identify the loan offer it relates to.
- It will also refer to terms of the Mortgage, which we generally refer to as Mortgage Common Provisions.
- It is this Mortgage Form that will be be registered against the title of your property through the land titles office.
- The registration of the Mortgage effectively provides a public record that the lender holds a security over the title of your property.
- In effect, you cannot sell, transfer or otherwise deal with your property without also dealing with the lender, as the Mortgagee.
- Mortgage Common Provisions
- These are the terms that apply to the Mortgage that will be registered on the title of your property.
- We refer to them as ‘common’ because they are usually the same terms used for every mortgage held by the lender.
- The mortgage terms set out the rights and obligations you and the lender have in your relationship as mortgagor and mortgagee.
- Legal Advice Declaration
- You will be required to provide evidence of the fact that you have obtained legal advice regarding your reverse mortgage loan.
- That is usually undertaken by swearing to the truth of a written declaration and signing such.
- The declaration will usually require you to provide details of the lawyer and law firm used, and require that lawyer, to witness the execution (signing) of that declaration.
- Rates Notice
- As your loan is going to be supported and secured by a Mortgage, it is important that the lawyer also obtain evidence that you do own the property that is to be used.
- As you’ll generally already own the property, the easiest way to provide that evidence is by providing a copy of your latest rates notice issued.
- Most rates notices provide details of your name, the address and the title lot and plan numbers.
- These can then be cross-referenced with your Mortgage Form as check on your right to mortgage the property in question.
The documents described above are usually the bare minimum required and it depends on the lenders requirements, and your circumstances if other documents might be necessary to provide to your lawyer.