Reverse mortgage products undergo tweaking
A leading Australian reverse mortgage specialist has announced a raft of product changes to its home equity release product aimed at expanding uptake by seniors.
Australian Seniors Finance (ASF) announced the product improvements and contract changes, claiming they would “give seniors greater ability to use the value of their home to enhance their lifestyle”.
Key changes include the abolition of monthly administration and ongoing fees, and the introduction of fixed-term contracts of five or 10 years.
Should a borrower die or enter long-term care, ASF will allow 12 months for the sale of the property, provided the loan does not exceed 85 per cent of market value.
ASF has also introduced a series of options such as the ability for customers to transfer their loan to a new property, provided it meets ASF criteria, and an option for borrowers to rent out their property for up to five years.
While the changes indicate the need to continue to encourage consumers towards what is still an embryonic market, ASF managing director John Thomas has been pleased with consumer interest in Australian reverse mortgages.
“More and more seniors are taking advantage of the home equity release opportunity to enjoy a more rewarding lifestyle,” Thomas said.
According to Thomas, ASF has already incorporated many of the announced changes into day-to-day dealings with customers.
“We are now formally incorporating these commitments in our contracts,” he said.
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