Hi all,
My mother is 64 and widowed. She owes 124k on her mortgage and has about 40k in super. She works full time and nets about $2000 a fortnight after tax. No other loans. House is worth at least 400k.
Do you know any lenders who would lend this not as a reverse mortgage? And at a good rate? Over how many years would be the maximum age they would lend until in these situations?
Thanks in advance :)
"the Age Discrimination Act 2004 and National Consumer Credit Protection Act 2009, prevents lenders from discriminating against mortgage applicants due to their age"
Regardless, some seem to..
See here…
https://www.finder.com.au/what-is-the-maximum-age-for-a-home…
It's not age discrimination to acknowledge the fact that a 64yo has less ability to repay a 30-year mortgage than a younger working person.
However reverse mortgages do exist which does not envisage full repayment and effectively assumes the property will be seized after a certain timeframe.
Thanks for this info :)
Most banks will cash out on an incoming refinance. You should get about $300k, just drop it all into an offset account. That way you have access but aren’t paying interest.
Try BoQ as a starting point.
I have to disagree. No bank will cash out for a 64 year old over with no clear exist strategy or way of paying off what they cash out let alone the actual mortgage.
It's pretty disgusting that as a mortgage broker you're even putting thought to such an irresponsible transaction. Shame on you.
And the fact that you disagree that cash in held offset reduces interest payments, honestly your licence should be revoked.
Try Firstmac or loans.com.au max loan term would be 25yrs. (Note - affiliation). But if she only owes $124k she needs to weigh up the cost of switching eg possible application fees, valuation fees, mortgage discharge fees, new mortgage registration fees etc, then see if it's still worth the switch.
Is it worth looking at downsizing? Selling up to cover that $124k so the poor woman doesn't have to keep working till she dies?!
Drop down to a unit or villa, nice low maintenance and cheap bills
Thanks I hadn’t thought about that and it’s probably worth considering! Although she lives in the country now and would want to retire in the city near me. So I don’t expect her to be able to afford anything, even a unit, that is anywhere near Melbourne city. :/
Big ask, but would you be prepared and able to put a granny flat on your property? Cost about $150k, gets her own space, and then has spare money for retirement
Brilliant idea that I’d certainly be fine with if I didn’t live in a high rise apartment myself 😣
Be careful about downsizing; there will be fees both ways and she has to look at pension eligibility etc. City house prices have gone nuts for a while now. However, if interest rates start going up you might find more properties coming on the market at a more reasonable price.
Good luck with it.
Next case study at the Royal Commission - Greedy bank makes old lady work til she dies to repay mortgage
Old? 60 is the new 40.
Greedy bank makes old lady work til she dies to repay mortgage
The bank is doing no such thing. Op’s mother is the one that’s making an application for refinancing.
Yes but the bank is the one that's required to meet responsible lending obligations
The lender hasn’t approved anything yet. Let’s wait and see what they do with the application before pointing fingers.
What is the reason for wanting to refinance? To free up equity?
She has 115k in redraw that came from my dads life insurance, she has a clear credit history and no debts now, but in the past has had gambling problems that I am afraid will resurface now that she is coping with dads death. That redraw needs to disappear for her own good so that she doesn’t touch it. That is the first reason.
Secondly, I just refinanced to 3.59% with no fees (except title office fees), and my mum is paying 4.19% which is likely to go up again in the next few days. I was thinking she could get a 10 year loan and aim to have it paid off in 8? She is already paying $800 a fortnight into the home loan, which should have it paid off in 8 years at that rate, and that’s without counting superannuation.
3.59
is that bank of sydney or suncorp ?
Nah it’s with ubank! And they also have interest only investment 3 year fixed rates of 3.99%. So glad I locked my 2 IP’s in for 3 years!
Has your mum tried asking for a lower rate and back up that request with some offers from other banks? Possibly won’t match the lowest rate but should be able to get lower than the current one (and much easier)
Yeah I did try that but they wouldn’t negotiate because the title is still under my mum and dads name and my dad passed away. It’s one to sign so it felt like a pretty poor excuse to me, which is why I thought if we are going to pay fees to change the title anyway just to get a slightly lower rate then we may as well refinance it too at the same time!
@islandgirl123: that is a very poor excuse from the bank! Fair enough about refinancing the same time as changing the title. Best of luck with everything! Have you thought of speaking to a broker? If you find a good one (big if) they can take out a lot of the homework in finding the best rate
@DisneyPrincess: thank you so much. Very kind. Yes I think it might be time to source a decent broker!
Hrmmm, this just went from bad to worse I'm afraid. No bank is going to refinance your mother at 64 with only 40k in super and a history of gambling.
Just call up your bank and tell. Them to reduce the limit on your loan by using up the 115k redraw.
That will reduce her loan down to around 15k,or did you mean after taking the redraw she would still have 124k?
Either way I'm afraid unless you mother downsizes she's going to find it close to. Impossible to refinance. Goodluck mate.
considering the loan size it could be hard to get a good rate, also the fact that we are anticipating the rates to go up…4.19% seems reasonable
banks now look at applicants monthly expenses, so you might want to research on that and "polish" the figures before approaching any lenders
this will affect her capacity to repay the loan
good luck :)
4.19 only reasonable for big 4s
even with 150k loan size , can get 3.75 or less from smaller banks, heck even anz offered that last month
Thanks both. Yeah it’s bankwest with the 4.19. Probably will go up again in the next few days. I guess when the loan balance is as low as it is it doesn’t make that much difference financially….but still, enough to annoy me!
most banks will lend if she is able to 1. service the loan without financial hardship, and 2. have an exit strategy in place. if these two items check out, then it's ok. Reverse Mortgages are becoming more popular, and would be a good option for her as she wont need to make any repayments, but I would assume it wont sit well with her beneficiaries, as you have already demonstrated
It’s not that it won’t sit well with beneficiaries. It’s that reverse mortgages are a rip off and the whole point of refinancing was to pay less interest, not more!
https://apple.news/A_rakwpJbTbqqgdbKxMwN9g
I think you’re right about the exit strategy and lending. I’ll plan it all out before I take her to the bank! Thanks
Go to a mortgage broker