Reverse mortgage misconceptions: SEQUAL

Industry body the Senior Australian Equity Release Association of Lenders (SEQUAL) has voiced its concerns that myths and misinformation surrounding reverse mortgages and equity release products is stopping retirees from enjoying a more comfortable lifestyle.

Executive director of SEQUAL, Kieren Dell, said that with the booming proportion of the population entering their 60s the equity stored in the home may be critical to funding retirement. Yet, many retirees would rather live poor than use part of the equity to fund a better lifestyle because of their false fears and misconceptions of reverse mortgages.

Some of the concerns spelled out by SEQUAL include:

• Home ownership issues - many believe they will lose ownership of their homes when taking out a reverse mortgage.


• Loss of capital growth - some believe that they will not be entitled to the appreciation in their homes upon getting a reverse mortgage.

SEQUAL wants to dispel these myths and let homeowners understand that a reverse mortgage is simple a loan against the home and the homeowner retains complete ownership of their home.

There are many myths surrounding reverse mortgages in the retirement community, but provided you deal with a reputable lender who is a member of SEQUAL, fear of these myths should not stop retirees from using these products in the right circumstances, Dell said.

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