ASIC warns on reverse mortgages - The Age- Topic: Cash Plus Money Loan
ASIC interviewed 29 reverse mortgage borrowers and found very few of them had thought about their longer-term financial needs before taking out the mortgage. ASIC says 14 borrowers didn’t know how much their loan would cost over time, six didn’t understand how compound interest worked and more than half were unaware of what would happen if they breached a loan condition. As well as getting independent financial advice, borrowers should insist on long-term projections of loan costs and how they’re likely to affect your home equity. The industry has been working to improve advice on reverse mortgages through measures such as SEQUAL’s accreditation program for mortgage consultants and its tightening of “no negative equity” guarantees for lenders (which ensure your loan will never be more than the value of your home). Find Out More
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