Reverse mortgages

Reverse mortgages

If you want to apply for a reverse mortgage, the current lenders in New Zealand are Heartland Bank and SBS Bank.

Ross Holmes Virtual Lawyers Limited can help you with advice and the legal work required for a reverse mortgage.

A reverse mortgage allows you to borrow money against the value of your property, which is paid back when you sell the house or pass away. However, this may not be suitable for everyone, and you should consider your situation carefully. Moneyhub suggests that a reverse mortgage should be the last option because of various fees that can make it expensive. Independent financial advice is recommended before making a large financial decision.

While a reverse mortgage has some benefits, such as being able to spend money on anything and not having to make repayments until your home is sold, there are also risks and drawbacks to consider. These include the possibility of losing equity due to compounding interest, and the inability to rent out or sell your home without paying back the loan.

If a reverse mortgage is not the right option for you, alternatives include downsizing, renting out part of your home, forming a Trust with your children as Trustees (and guarantors so the Bank will take their incomes into account) to enable borrowing from a bank, or asking your council about rates relief and rebates. It is important to get independent legal and financial advice and to carefully consider all of your options before making a decision.