Did you know that, for over 50% of Heartland new customers, some of their reverse mortgage was used for debt consolidation?

No one wants to spend their retirement years worrying about debt and keeping up with repayments, but it is a sad fact that many do.

If you are struggling with ongoing, monthly repayments, whether it is a mortgage, credit cards, personal loans or other debts, refinancing with a reverse mortgage could help you consolidate into one easy to manage loan. Voluntary repayments can be made at any time, but no regular repayments are required until the end of the loan.

But what could this look like in practice, and will you be able to borrow the right amount to cover your needs?

Let’s look at an example from our customers, Bruce and Jane* who used part of their Heartland Reverse Mortgage for debt consolidation.

Bruce and Jane’s case study

Bruce and his wife Jane own their own property in Bankstown valued at $735,000.

At 73 and 72 years old (respectively), they applied for a Heartland Reverse Mortgage to consolidate $10,000 of debt, pay for home improvements valued at $20,000, everyday expenses of $5,000, a new car for $25,000, and $60,000 for a strata levy. Their total initial advance request was $120,000.

They also requested to set aside the maximum amount available in a cash reserve facility.

The total loan amount requested was $120,000 plus the cash reserve.

How much could they borrow?

Jane was the youngest borrower, so we took her age when completing the calculation.

72 (age) = 32% LVR (maximum potential loan)

32% (LVR) x $35,000 (home value) = $235,200

Bruce and Jane were eligible to borrow a total of $235,200 which meant Heartland could lend them $120,000 as an initial advance and put the remaining $115,200 in a cash reserve facility.

Taking out a Heartland Reverse Mortgage helped Bruce and Jane to live a more comfortable retirement by covering a range of needs while consolidating outstanding debt, which removed the need to make regular monthly repayments.

Want to know more? Find out more about using a reverse mortgage for debt consolidation or request your free Reverse Mortgage Guide.

Ready to apply? You can now Apply Online or request an Application Pack that provides everything you need to apply.

If you require any assistance, feel free to get in touch, we are here to help you.

 

*Names have been changed to protect the privacy of our customers.

Information provided is accurate as of 18 January 2024 and may change from time to time.