Debt free equity release continuing to be a popular alternative to Reverse Mortgages


Dianne Shepard

A review released this week by ASIC into the reverse mortgage market in Australia, has drawn attention to the need for safe and certain equity release solutions for older homeowners.

Homesafe Solutions Pty Ltd, the provider of Homesafe Wealth Release®, the only competitive alternative to reverse mortgages in the equity release sector, welcomes the report’s recommendations which seek to ensure protections for senior homeowners.

Dianne Shepherd, Chief Operating Officer of Homesafe said: “The wealth built up in the family home has become the fourth pillar of the retirement system in Australia, and it is important for seniors, today and in the future, to have access to products which can provide the ability to access this wealth when needed the most”.

Homesafe Wealth Release® has been designed to provide older homeowners a mechanism to access the wealth in their home, by providing an upfront lump sum payment, in such a way which addresses future uncertainty. Specifically, Homesafe Wealth Release® is a property transaction and not a loan, which enables the homeowner to sell a capped future share of the eventual sale proceeds of their home in return for a cash amount today whilst retaining the right to live in the home and choose when they sell. The capped share approach, provides greater certainty by ensuring the homeowner is not burdened with property growth, longevity or interest rate risks, as may be evident in alternative equity release products.

For over 13 years Homesafe Solutions Pty Ltd has provided its debt free equity solution via its customer centric, ‘one-on-one’ approach to customer service, and has built a respected reputation in the market by providing a facilitation model without sales staff or selling strategies.

“Homesafe has continued to assist its growing customer base through understanding their needs and objectives, and long-term aspirations. Homesafe Wealth Release® has been designed to offer a solution which can protect the future equity in the home, to ensure the homeowner can plan for future aged care needs or estate planning for their beneficiaries”. Ms Shepherd said Homesafe acknowledges the recent release of the ASIC review into reverse mortgages and supports recommendations which seek to ensure greater protections for senior homeowners.

“Moreover, we are pleased the review confirms the need for equity release products across the wider market, to assist seniors achieve financial independence in retirement – a need which is confirmed by the ever-increasing demand for our debt free alternative to the reverse mortgage product.”

About Homesafe Wealth Release

Homesafe provides a debt-free home equity release solution where the homeowner agrees with Homesafe to sell a share of the future sale proceeds of their home in return for a lump sum payment today – the home is only sold when the homeowner chooses, or after the death of the surviving homeowner, with the unsold share of the sale proceeds retained by the homeowner or their Estate. Homesafe is not entitled to receive any more than the agreed share.

Homesafe Wealth Release was established in 2005 in conjunction with Bendigo and Adelaide Bank.

1 comment

  • Paul Dwyer says:

    The ASIC report was actually complimentary of reverse mortgages. All the face-to-face interviews concluded the product met their initial needs, but attention had to be given to later circumstances that older Australians might face.

    ASIC Deputy Chair Peter Kell said “Reverse mortgage products can help many Australians achieve a better quality of life in retirement.”
    “But our review shows that lenders and brokers need to make inquiries that would lead to a genuine conversation., with customers about their possible future needs, not just a set of tick boxes on a form.”

    ASIC is looking for a more “holistic advice” in the sector.

    The structure of reverse mortgages
    – Lump sum
    – Income stream
    – Line of Credit
    provides a solution to meet both immediate and long term requirements. In the end, accessing equity when required, means a higher equity position in the future.

    As a 15 year adviser in this credit sector, I have recommended reverse mortgages, home reversion schemes and pension loan schemes, but the product best suited to the majority of the seniors market is reverse mortgages, when product structure, pricing and availability is taken into account

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