Lose the stress: A reverse mortgage can help ease financial worries allowing people to enjoy a more comfortable retirement.

Lose the stress: A reverse mortgage can help ease financial worries allowing people to enjoy a more comfortable retirement.

How would you spend some extra funds in your retirement?

How would you spend some extra funds in your retirement?

Recommended
Aa

Worrying about finances and being unable to do the things you would love to do because of the cost is not how anyone wants to spend their retirement years. A reverse mortgage could be the answer.

Aa

This is sponsored content for Heartland Seniors Finance.

Worrying about finances and being unable to do the things you would love to do because of the cost is not how anyone wants to spend their retirement years.

On a limited income, and with the rising cost of living, many Australians retirees can find it difficult to make ends meet and experience money stress.

It may be anxiety about whether to switch the heater on in winter, or finding the money to pay for medical expenses, a car service or an unexpected expense.

One option that can help ease the squeeze is to release equity in your home with a reverse mortgage.

If you own your own home you can use a reverse mortgage to source a lump sum, a regular advance, or cash reserve (like a line of credit), that you can use to live a more comfortable retirement.

"Our customers are using reverse mortgages for a range of worthwhile purposes - everything from renovations around the house to paying for medical bills," said Sharon Yardley, Head of Communications at Heartland Seniors Finance, which specialises in reverse mortgages.

Home repairs

Customers who take out a reverse mortgage for home repairs use it to future proof their home, improve their overall wellbeing and protect the value of the property.

"The longer home repairs and maintenance are delayed, the higher the risk of permanent damage to the property,"said Mrs Yardley. "This can, in turn, reduce the value of your home and quality of retirement.

"There may also be important health and medical reasons you need to do certain home improvements, from installing rails or fixing cracked footpaths to prevent falls, to installing a stair lift to aid mobility."

Paying off debt

No one wants to spend their retirement years worrying about debt and keeping up with repayments, but it is a sad fact that many do.

"Residential property is the major component of wealth for many entering retirement. However, the boom in house prices has also led to an increase in people carrying mortgages and debt into their retirement," said Mrs Yardley said.

"Consolidating and paying off debt is a popular option for many of our customers. They're able to pay off outstanding debt in one lump sum without crippling loan repayments."

Manage living expenses

A reverse mortgage can take the stress out of every day living by supplementing your income using the regular advance option.

"More than a quarter of our customers take out a Heartland Reverse Mortgage to help supplement their income to pay for their bills, living expenses and unexpected costs such as heating or car repairs," said Mrs Yardley.

Maintain your car

One thing that can make a difference to your every day life is replacing an old car with one that is safer, more comfortable and dependable.

"Using your reverse mortgage to purchase a new car fits within our worthwhile purposes criteria, and more than a fifth of our current customers use their reverse mortgage to either replace or repair their car," said Mrs Yardley.

Driving forward: Use extra funds to upgrade to a safe and comfortable new car that fits your retirement lifestyle.

Driving forward: Use extra funds to upgrade to a safe and comfortable new car that fits your retirement lifestyle.

Pay for aged care accommodation

In 2014 the Living Longer, Living Better reforms were introduced by the government to improve the accessibility, sustainability and quality of aged care in Australia.

The downside for consumers is higher care costs. Nowadays, if you have a family member going into aged care you may confront several fee layers such as the Refundable Accommodation Deposit (RAD).

The RAD is often the most difficult to pay. It's an upfront lump sum payment to the aged care facility. Families are often shocked to find they may need to raise between $300,000 and $500,000 or more.

"Most people think selling the family home is the only option but this can be a distressing outcome for families. In many cases the home could be retained by using a reverse mortgage to fund aged care entry costs," said Mrs Yardley.

Every situation is different. This information has been prepared without taking into account your needs, objectives, or financial situation. If you are considering a reverse mortgage, Heartland encourages you to understand how it may affect your personal circumstances - talk to friends and family, speak to professionals, and use the resources and tools Heartland has available.

Loans are subject to loan approval criteria. Terms, conditions, fees and charges apply. Credit provided by ASF Custodians Pty Ltd (ACN 106 822 780 / Australian Credit Licence No. 386781).

This is sponsored content for Heartland Seniors Finance.

Aa