Debt Management and Leverage

Residential property mortgages

Reverse mortgage

The main purpose of a Reverse Mortgage is to assist retired people fund their retirement lifestyle by using the equity they have built up in their home, without having to sell the home.

There are many different product options available, so it is important to read and understand the differences.

Some lenders take ownership of the property at a specific time whilst some want the debt repaid when the house is sold or the owner moves out.

Such a loan may reduce potential inheritances. At worst, you could end up with no equity left in your property. Reverse mortgages will have a negative equity guarantee in place to ensure that if the equity does become negative that the shortfall is not repayable by the borrower. The lender will carry the loss. You should check that this guarantee applies to any Reverse Mortgage loan that you are considering.