How your home could help take away financial stress in your retirement

This is sponsored content for Heartland Seniors Finance.

In our younger years we've all spent time daydreaming wistfully about retiring, looking forward to winding down and doing those things we don't have time for when we are head down and working hard.

Sometimes though the thoughts turn a bit dark. There's anxiety about whether we will have enough money to live the kind of retirement we're dreaming about. Or will it be one of skimping and going without just to be able to afford the necessities, and worrying about how you would pay an unexpected expense?

For many, the fear has become the reality. With compulsory superannuation only having come into effect in 1993 and people living longer, it's likely Australians working during the 50s, 60s and 70s haven't accumulated enough super to fund what is considered a 'comfortable retirement'.

Around 80 per cent of today's retirees receive an age pension but on a limited income, and with the always rising cost of living, many face the stressful challenge of struggling to make ends meet.

One option proving a reassuring lifeline for many in this situation is the use of a reverse mortgage.

If you own your home, a reverse mortgage could allow you to tap into the equity in your home, taking the financial stress out of retirement by supplementing your income in a variety of ways.

It is an option increasing numbers of retirees are using to help them manage their finances while allowing them to stay in their much-loved own home and in the community they know, reaping all of the benefits that come with that.

"Around 30 per cent of our customers take out a reverse mortgage to help boost their income to pay for their bills, every day living expenses, and unexpected costs, such as heating, car repairs, or maybe a trip away," said Sharon Yardley, Head of Operations at Heartland Seniors Finance, the company whose reverse mortgage product has been named Money Magazine's Best of the Best four years in a row, as well as Infochoice's Best Reverse Mortgage for 2020.

"Research shows that for a number of reasons more people are carrying debt into their retirement and they are relying on the pension which statistics show may be enough to get by but doesn't cover those things that can pop up, like medical expenses or a new roof .

"A reverse mortgage can be used to relieve some of that income stress letting people live the life they've invested in, in the home they worked so hard to pay off. Just a small amount extra can have a big impact. It could be the difference between being able to enjoy that daily cappuccino you love or being able to catch up with friends for dinner, or having to miss out."

A reverse mortgage allows people over 60 access to funds either as a regular income stream or as a lump sum, and while you are able to make repayments when you wish you aren't required to until you pass away or sell your home.

Heartland also offers a cash reserve option that is similar to a line of credit that you can draw down on as needed with no interest charged until you access the funds.

Later on, if you need it, there is also the further advance option that lets you take advantage of any potential increase in the value of your home.

As with entering any loan agreement it's important for anyone considering a reverse mortgage to speak to their own legal and financial advisers, as well as your family, to be certain they understand the implications for their financial future.

However, stringent rules over the sector mean reverse mortgages are one of the most highly regulated financial products in Australia. Most reverse mortgage providers, such as Heartland Seniors Finance, require that independent legal advice be obtained.

"There are significant protections in place by law," said Mrs Yardley. "And that's because older people should be well protected and they should have a product that provides that protection and security, while also giving them that peace of mind from financial stress."

Want to know more?

To find out more about reverse mortgages, and how they could help you pay for ongoing expenses in retirement, contact Heartland Seniors Finance.

Heartland has now assisted over 21,000 Australian seniors release the equity from their homes to live a more comfortable retirement with their reverse mortgage. Request your free no-obligation Reverse Mortgage Guide.

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. There is no assurance that property values will increase over time and property values may also decline. 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.

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