Reverse Mortgage?

Hi everyone,

Following on from my previous thread of how I can assist my child (cash) from an IP that I have. Basically no way I can give her access to the deeds to borrow against without me being involved in the company she is setting up. also that has ramifications with my pension and declaring etc, etc. As most institutions said it will not pass the "Today Tonight test".


One option though is a reverse mortgage, even though it's not the LVR of 80% that a business loan is, the amount can assist her.

My question is, can the reverse mortgage be cancelled when her business picks up?

Any implications with Centrelink if I give her the money for me?

thoughts?

Thanks.

 

If you use a reverse mortgage you would be borrowing and lending her or the company money. If she pays you back the loan could be paid out and the mortgage discharged.

Yes centrelink implications

 

You will find that you don't meet the loan purpose requirements unless you're going to lie to the bank.
The funds are meant to be for personal use for you, not to be on lent to family.
You will also likely need to get independent advice from a financial planner along with a solicitor - both not likely to sign off, unless you plan to lie to them also.

 

Thanks.

She would be paying the Interest initially and then pay out the loan after a period.

Yes, I will have to look into the deeming rates and how it will effect the pension.

Thanks again.

 

If it was me, I would not provide a reverse mortgage for a business loan. Your daughter can get a business loan from a bank if she has a decent business case. 80 per cent of start up businesses go bust within two years.
I think the kindest thing might be encourage your daughter to save up to start her business or help her apply for jobs. She could even go to TAFE and do some business study.

 

She shouldn't be paying your bank but you and you pay the bank.

 

I would not do it if I were you, even if your willing to do whatever to get the loan, unless you can afford to give that money away no problem, or are happy to lose it and pay back the loan yourself.

Like someone else said, usually if the business case stacks up, a normal lender will see that, but then they may ask you to go guarantor....which puts you back to para one above.

 

unless they prove they will be happy on the street in a sleeping bag when no one pays the mortgage cause they will take the home and sell it.....if loan was done correctly.

 

Nah, I would not do it either, I am already talking them out of it and I have no fees (but I should have ;-)) )

 

Brokers have to consider whether the loan is not-unsuitable. If a broker gets someone finance when it is unsuitable they could be breaching the NCCP Act and could be liable for penalties and civil litigation.

 

My, my. The age we live in.

Banks taking 'tick-box' approach to reverse mortgage risks: ASIC

Banks taking 'tick-box' approach to reverse mortgage risks: ASIC

Legals will probably be all over this reviewing the nuts and bolts, Powers of Attorney, blah, blah, blah and so on.

And the end result will be?