Reverse mortgages seminar in Rockingham
Issue Date: - Friday, 3 April 2009
The complexities of reverse mortgages will be outlined at a seminar in Rockingham this month by the Department of Commerce Consumer Protection division and the Council on the Ageing WA Inc.
The seminar is one of a series being held in Western Australia for consumers.
The Commissioner for Consumer Protection Anne Driscoll said reverse mortgages were loans that allowed people to use the equity in their home to obtain money, repaying the debt later.
“They can be very attractive when people need extra money, and many seniors have taken advantage of them in the past.
“However, they are very complex, and there can be risks. It is important consumers fully appreciate their legal rights and responsibilities, and understand potential pitfalls,” Ms Driscoll said.
“Reverse mortgages often don’t require repayments until the property are sold, the owner moves into a retirement village, an aged care facility or passes away. Borrowers also may have to sell their home and repay the loan in full if they breach certain clauses of the loan contract,” the Commissioner said.
If spouses, partners and other family members were not a co-borrower on the loan they might have to vacate the property when the borrower passed away.
“Given the current difficult economic times, many senior home owners may find the idea of a reverse loan attractive. Consumer Protection wants to ensure that anyone considering reverse mortgages is fully aware of how they work,” the Commissioner said.
The Executive Director of Council on the Ageing WA Ken Marston said that with interest payments and dividends falling, many older people were seeking ways to boost their income.
“Some are looking at reverse mortgages, so it is very important people have accurate and unbiased information to help them make wise choices,” he said.
“Taking on a reverse mortgage is a complex and long term decision, so consumers need to be well informed.” Mr Marston said.
The two hour Rockingham seminar will be held on Thursday, 16 April, from 10am through to midday at the Gary Holland Community Centre, 19 Kent Street, Rockingham.