With rising living costs, an interest rate rise and an increasing desire amongst baby boomers to take financial control of their retirement, Equity Release products are a popular way for baby boomers to fund their financial goals.
Fortunately, there are several ways you can access the wealth accumulated in your home when you need it. The available options generally fall in to two categories - debt-based and debt-free strategies.
A debt-based option is a loan product, where you borrow against the equity in your home. Repayments are not required, and instead the interest charged by the provider will be capitalised against the loan over time, adding interest to the loan amount you have borrowed. Such loans are not required to be repaid until you sell your home, or you pass away.
Debt-based solutions come in different forms - you may borrow the funds via a reverse mortgage product offered by private providers or take up the loan scheme offered by the Government (previously referred to as the Pension Loan Scheme). The amounts available via a reverse mortgage and the Government loan scheme may be less than via a debt-free strategy and the interest rate charged will be higher than traditional home loan rates, given the nature of the debt.
A debt-free option is not a loan, and as you don't borrow money, there is no capitalising interest costs over time. Repayments don't apply, and instead the entitlement of the provider is capped so you can protect a portion of the equity in your home into the future. You can also sell your home at any time, or the provider will receive their entitlement when you pass away, and your home is sold.
Whichever option you may be considering, it is a big decision with lasting ramifications, and it is important that you make the right decision for your circumstances.
Homesafe Wealth Release® is the popular debt free equity release solution for homeowners to access the wealth in their homes. Homesafe is not a reverse mortgage or a loan product and is specifically designed to provide protections for homeowners for the life of the arrangement.
For over 17 years, Homesafe (in partnership with Bendigo & Adelaide Bank) has provided a tried and tested solution which has assisted thousands of homeowners by focusing on providing a safe and secure equity release option.
As the popular alternative, the Homesafe option is a part sale property contract, where a homeowner receives a lump sum cash amount today and in return agrees to sell a capped share of the future sale proceeds of the home. Homesafe will only receive its share of the sale proceeds, usually many years down the track, when the homeowner chooses to sell or after they pass away.
A special and unique feature of the Homesafe Contract ensures if the homeowner sells earlier than anticipated, due to a unique feature, Homesafe will often receive less than the agreed capped share and the balance is returned to the Homeowner at time of sale.
How can I make an enquiry with Homesafe?
The team at Homesafe offer personalised service by phone initially, and a no-obligation meeting with a Homesafe Mobile Specialist in the comfort of your home is organised to ensure you can receive all the information you - and your family - need to make an informed decision.
For more information on how Homesafe has helped baby boomers to payout debt for over 17 years, contact Homesafe on 1300 307 059 or visit www.homesafe.com.au.
*Terms, conditions, and eligibility criteria apply. Homesafe Wealth Release™ is available in 90% of eligible postcodes in Melbourne & Sydney.