Experiencing debt in retirement? A reverse mortgage could help

Experiencing debt in retirement? A reverse mortgage could help

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Due to the rising number of people retiring with debt, there is an increased need for financial products that will suit retirees.

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This is advertiser content for Heartland Seniors Finance.

House prices have increased at a much faster rate than income since the mid-1990s, which has led to three times the amount of people carrying mortgages and debt into retirement.

When you pair this with the ageing population, it leaves many retirees strapped for cash, in what is supposed to be their 'golden years'.

The problem with debt in retirement is that retiree income is capped. With many living on the pension alone, it can be hard to pay for anything other than the basics.

It is often not enough to continue paying for a mortgage or other debt repayments, let alone living a comfortable retirement, free from financial stress, which is what many retirees hope for.

Some may try to bandaid this problem by accumulating credit cards, or a personal loan (if they can obtain one), just to get by. However, these financial products are not typically designed to fit in with a retiree's income or lifestyle. With high interest rates and ongoing, regular loan repayments, many are unable to keep up.

Of course, there is the option to downsize, and use the proceeds to pay off this debt, but studies show that over 70 per cent of those aged 55+ would like to stay in their current home, and many have an emotional connection to their home, so downsizing isn't always the best option.

So, what are seniors to do? Due to the rising number of people retiring with debt, there is an increased need for financial products that will suit retirees. An option that has been growing in popularity is taking out a reverse mortgage.

The great thing about a reverse mortgage is that it is specifically, and flexibly designed for the needs of seniors. This flexibility includes:

1. Loan repayment

Regular loan repayments are not required, however voluntary repayments can be made at any time. If regular repayments are not made, the total interest charged, together with the amounts drawn, will be payable at the end of your loan when you move permanently from your home.

2. Loan usage

You can use funds from a reverse mortgage to consolidate outstanding debt into one lump sum. This gives peace of mind, allowing you to live a more comfortable retirement, free from financial stress. Loan data from leading reverse mortgage provider Heartland Seniors Finance shows that over 50 per cent of customers use their reverse mortgage to repay or consolidate debt, it is one of their most popular uses.

3. Loan access

As well as using a reverse mortgage to consolidate debt, it can be used as a regular income stream for bills and expenses, or a cash reserve (like a 'line of credit') for future needs or unexpected emergencies, such as home improvements, travel, a new car, medical expenses and much more, providing further flexibility and peace of mind.

Want to know more?

To find out more about reverse mortgages, and how they could help you consolidate debt in retirement, contact Heartland Seniors Finance. Heartland has now assisted over 20,000 Australian seniors release more than $1bn of equity from their homes to live a more comfortable retirement with their reverse mortgage.

You can also request your free no-obligation Reverse Mortgage Guide here.

Heartland Seniors Finance

Website: www.seniorsfinance.com.au

Phone: 1300 889 338

Email: enquiries@seniorsfinance.com.au

Please note the information set in this article may change from time to time.

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, we encourage 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.

Applications 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 advertiser content for Heartland Seniors Finance.

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