Years ago, it was common to pay off your home loan using all your extra income as quickly as you possibly could.
This often resulted in having a home loan being paid in less than 30 years. There was a lot of sacrifice – no annual holidays, reduced recreation activities, frugal living and mindful of the cost of living.
During this period, superannuation was not compulsory and many females were involved in home duties and did not necessarily return to work after bringing up families. Part of this was a law after the depression which meant married women could not have jobs as they were reserved for single women at that time. Very different times and thankfully women now have more working rights.
This can mean your Mum/Dad or Grandmother/Grandfather can be struggling to live on the Aged Pension but have equity in the home. Costs can come up – medical costs not covered by Medicare (affecting mobility), they may need a new car but can’t manage the cost with the Aged Pension, or may need renovations with the recent floods/storms not covered by insurance.
Some pensioners may not have any insurance in place due to the cost as insurance can be the first debt some pensioners may forgo as the cost of living increases.
Lenders have provided a solution for applicants to access the equity in their home for these major costs while still being on the pension which allows them to stay in their own property.
This may not be a solution for all homeowners on the pension as there is a set of criteria which needs to be considered. Repayment terms can be deferred or you can nominate to pay interest only or more – depending upon your affordability.
We encourage you to speak to your financial planner or accountant if you would like a 2nd opinion whether taking on this loan would be to your benefit as well.
If you would like to know more about your options, please contact us to discuss
Mobile: 0403 211 361
Email: hello@georgefinancialservices.com.au
