An equity release is an awesome solution that benefits retirees in Australia. The ASAG equity release is an excellent loan product for retirees with different financial needs and goals. Here’s what an ideal candidate for an ASAG Equity Release should be.
A loan product as an equity release is suitable for candidates that fit one of these profiles:
- Owes a little debt, or none at all, on their home, and doesn’t need the fund immediately,
- Has a huge mortgage balance with years to pay,
- A senior homeowner who doesn’t consider leaving equity to their heirs.
Before further details on these attributes, here’s how an equity release works.
How does an ASAG Equity Release work
A common loan product for retired Australians, an equity release is designed to give homeowners aged 60 or over access to some equity in their home. No regular monthly repayments are required and what they have to repay is just the value of their home.
The borrower will always be the homeowner as long as they pay the property charges. The interest on an equity release accrues on the borrowed money and compounded onto the loan balance over time.
An equity release is flexible and can be tailored to any financial needs. The proceeds can be received in various ways, such as a lump sum, line of credit, regular payments, or any combination of all.
The proceeds can be used to finance home improvement and renovation, supplement retirement income, or pay off outstanding debt or existing mortgage.
The ideal candidate for an ASAG Equity Release
As equity releases are adaptable to any financial situation in retirement, this type of loan product can still be offered to someone who doesn’t possess the following attributes.
Owes a little debt, or none at all, on their home
If a candidate owes little to nothing on their home, we can assume they’re financially stable. Hence, they don’t need the funds immediately and can take the proceeds as a line of credit.
This line of credit is like a traditional home equity release, except there’s no regular repayments required. The loan doesn’t have to be paid off until the end of the term. ASAG Equity Release becomes payable when the borrower is no longer living at home, not taking care of maintenance, and not paying property rates and fees.
The proceeds can be used as a retirement income, and provide a safety net for emergency expenses.
Has a huge mortgage balance with years to pay
Another trait of an ideal candidate for an equity release is a homeowner who doesn’t plan to sell and has years left on the mortgage.
Recently, many retirees have been taking advantage of refinancing for reduced monthly payments and low interest rates. Refinancing an existing mortgage frees up funds that can be used for other vital things.
A senior homeowner who doesn’t consider leaving equity to their heirs
With equity release, as the loan amount increases, the equity of the home decreases. Therefore, it’s not ideal as inheritance.
If you don’t plan to leave inheritance to your children or other heirs, there won’t be a problem as they cannot stay in the home after you pass away.
An ASAG Equity Release is a helpful solution for the right candidate. If you have one of these attributes, maybe this type of loan product could be suitable for you.
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