Looking after the parents

Discussion in 'Living Room' started by Teah62, 4th Oct, 2019.

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  1. Beano

    Beano Well-Known Member

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    Yes if we signed up a reverse mortgage when interest rates were 18pc fixed for life the break fee would be super high
     
    Beano, 4th Oct, 2019
    #21
  2. PandS

    PandS Well-Known Member

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    Next RC will be on reverse mortgage
     
    PandS, 4th Oct, 2019
    #22
  3. Teah62

    Teah62 Member

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    Teah62, 5th Oct, 2019
    #23
  4. Teah62

    Teah62 Member

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    yes it is a reverse mortgage loan, this is the information I have. Loan commenced on 17/10/2007, amount was $66,300 first payment of $35,000 followed by payments of $521.67 for 60 months at a fixed rate of 8.79%. As far as payment they are only required to pay 6 months after they die or (one or the other) move to long term aged care. I would estimate that their property at the moment is valued at approximately $380,000 the contract also has a statements that says "The lender can change any of the financial information described above without your consent. The change may include the method of calculation of interest or rates of interest, repayment amounts, payment dates for repayments and fees and charges (but no change can be made to a fixed interest rate during a fixed rate term and no change can be made to repayments during a repayment free period). In addition, the lender may introduce new fees and charges without your consent."
     
    Teah62, 5th Oct, 2019
    #24
  5. Marg4000

    Marg4000 Well-Known Member

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    Write to the lender and ask for a payout figure for a projected date, I.e., in 3 months time (to give you time to sell).

    Until you have that, in writing, you are acting blindly.
     
    Marg4000, 5th Oct, 2019
    #25
    wylie, The Y-man and Terry_w like this.
  6. Trainee

    Trainee Well-Known Member

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    Unfortunately everything went against the borrower here. Interest rates fell and wa prices havent gone up.
     
    Trainee, 5th Oct, 2019
    #26
    Beano and Teah62 like this.
  7. geoffw

    geoffw Moderator Staff Member

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    In 2007 for 5 years? Are those numbers correct?
     
    geoffw, 5th Oct, 2019
    #27
  8. Teah62

    Teah62 Member

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    There is no actual date for repayment just when they die and as far as I know they haven't locked in a date for that. The 60 months is the loan received by parents at a agreed amount of $521.67 hence total loan $66,300
     
    Teah62, 5th Oct, 2019
    #28
  9. The Y-man

    The Y-man Moderator Staff Member

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    I (very) roughly calculate the current principle to be about $182k, and interest at $16k pa increasing by $2k pa.
    If the loan was for 20 year, then the expected income for the lender would be say another $190k, so a payout of about $370k ~~ but as per @Marg4000, get the quote from the lender.

    The Y-man
     
    The Y-man, 5th Oct, 2019
    #29
  10. Angel

    Angel Well-Known Member

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    Any chance the loan reverts to Variable after the initial five year term?
     
    Angel, 5th Oct, 2019
    #30
  11. Scott No Mates

    Scott No Mates Well-Known Member

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    Buckley's
     
    Scott No Mates, 5th Oct, 2019
    #31
  12. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    Bluestone are a non conforming lender similar to Liberty, for eg, and as far as I'm aware they don't do reverse mortgages any more.

    I can't help with the situation, I don't do reverse mortgages so not really familiar with the terms around them.
     
    Jess Peletier, 5th Oct, 2019
    #32
  13. Angel

    Angel Well-Known Member

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    Yes Jess, there was nothing on their website last night about reverse mortgages.
     
    Angel, 5th Oct, 2019
    #33
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