Naturally, this means that the question of ‘What can I use a reverse mortgage for?’ can vary considerably.  

Thinking of what you could do with a reverse mortgage? We’ve pulled together a list of some examples of common purposes that our customers are releasing home equity for.

Home renovations and maintenance

The first one is to fund home renovations. The need for renovations comes from a wide range of situations, but they generally always involve a large sum of money that gets invested back into the home.

Our customers have used these funds to finance a whole range of improvements from cosmetic or maintenance improvements, to new kitchens and bathrooms, and even, in some cases, supplementing funds needed to complete the construction of an entirely new property.  

Ageing in place is also an important priority for many of our customers. It’s very natural to wish to stay in the home that you’ve worked hard for and where you have all those memories. This, however, often requires modifications to meet the realities of living later life.  

Typical sources of retirement funding such as superannuation or the pension may not be enough to provide the large sums needed for these modifications. In these cases, a reverse mortgage can allow you to access a large sum without compromising on your savings or other long-term assets. The drawdown can also be tailored to suit the long-term nature of such projects by establishing a line of credit.

Debt consolidation or refinancing – paying off existing mortgages, credit cards etc.

Reverse mortgages are a very practical tool for raising the funds needed to consolidate debts - often those that are creating a month-to-month cashflow burden or even just refinancing at a more competitive interest rate.  

Many of our customers have used the funds from their loan to pay off their existing mortgages and credit card debts whilst simultaneously freeing up funds for other purposes.  

As reverse mortgages typically don’t need to be paid until the home is sold or vacated, they allow customers to eliminate regular monthly payments. As such, many of our customers have freed up their finances and have been able to cover other essential expenses, or simply have been able to enjoy life more fully.  

Enhancing retirement income

Another reason many people opt for a reverse mortgage is simply to supplement their retirement income.  

With the cost of living constantly on the rise, many older Australians find their savings, pension and/or superannuation stretched thin. Some of our customers have alleviated this financial stress by providing themselves with the additional funds to enhance their lifestyle and enjoy their retirement.  

Setting up a regular monthly income payment has given them the stable cashflow needed to meet everyday living expenses.

Delaying downsizing/aged care

Our customers often have the view that they will eventually sell their property and downsize or move into aged care. However, more often than not this is something they have not wanted to happen immediately – but the financial and health realities of this decision has brought that conversation up earlier than they would have preferred.

However, by taking out a reverse mortgage, our customers have been able to release the equity in their homes for other purposes – whilst still being able to live in the home and community that they enjoy. This has allowed them the time to see out their retirement years at their ideal timeline and pace.

Supporting family  

Due to the nature of reverse mortgages, customers are often worried about the inheritance they will be leaving their children – a very understandable and critical point to consider in your later life decision making.

However, some of our customers have chosen to use all or part of their reverse mortgage funds to help their children or grandchildren now, rather than waiting until their estate is passed down.  

Considering the squeeze many of our children are currently under, it can be particularly helpful to give them the boost they need (through a financial gift or private loan) to get on the first rung of the property ladder or to progress further along it.  

Other similar uses include contributing to education costs or shoring up shared investment funds. Whether assisting with these or helping secure a deposit on a house, using a reverse mortgage in this way allows you to give your family a strong financial foundation – and one that you can begin to enjoy the rewards of now.

Conclusion

One of the greatest strengths of reverse mortgages is their flexibility. The funds can be used in a myriad of ways to improve your livelihood and are often put towards multiple important goals simultaneously. These are just a few of the ways our customers have chosen to use a reverse mortgage – you can find more on our website.

If you think a reverse mortgage could be the solution for you, please don’t hesitate to get in contact. Our team of consultants will take the time to understand your circumstances and help tailor the loan to suit your situation, wants and needs.

Contact us today to learn more about how a reverse mortgage can enhance your retirement and help you achieve your goals. Your story could be the next one we share!