MPA Webinar 2018: Your Questions Answered
Heartland recently held a Reverse Mortgage diversification webinar with Mortgage Professional Australia. During the presentation, we answered some questions from the brokers who attended.
We received some great questions, and would like to revisit the ones we are asked frequently:
Why is the interest rate higher than a standard variable home loan?
There are three primary factors behind reverse mortgage pricing. Firstly, there are no regular repayments, which means as a lender there is no cash flow until the loan is repaid. Secondly, we receive no formal loan term (the loan is due to be repaid when the last borrower leaves the property). Finally, reverse mortgages offer borrowers considerable protection including a no-negative equity guarantee, meaning borrowers cannot owe more than the value of the security. This means the loan is non-recourse and Heartland takes on this risk. In saying that, our interest rate is very competitive.
Who owns Heartland Seniors Finance and where do they get their funding?
Heartland Seniors Finance is owned by a New Zealand registered bank called Heartland Bank. It is a bank with a deep history that stretches back to 1875 and reverse mortgages are a core part of the business.
We are funded by a combination of Heartland Bank funding, and a wholesale facility from a major Australian bank.
Do you allow applications under Power of Attorney?
Yes, we frequently accept applications where there is a Power of Attorney acting on behalf of the customer. It must be an Enduring Power of Attorney, and the applicant must have lost capacity to sign, or is not able to sign due to physical impairment. We are unable to accept applications under general power of attorney, or if the client is able to sign on their own behalf.
Do you accept applications from clients who have credit impairments?
Heartland Seniors Finance will review every customer’s situation, and in many instances is able to assist with repayment of defaults depending on the circumstances. We are not able to consider Bankrupt applicants.
Do applicants need to be retired, in other words, irrespective of age, can applicants still be working?
Definitely, many of our customers are still working, some even into their 80’s. You do not have to be receiving the Aged Pension or a form of Superannuation payment to qualify.
Any other questions?
Our specialist, dedicated support team are available to assist with any other questions you may have, to discuss scenarios, or provide any assistance you may require in developing this part of your portfolio. Please feel free to contact us at 1300 662 865 or [email protected].
Information provided is accurate as at 13 April 2018 and may change from time to time