You cannot consolidate until you have equity, so you may have to buy something and wait 6 months or so, and then increase the loan to payout your other debts.

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Actually, I think i remember talking to someone at Westpac about this. I think the loan is just handled in a different section, and the conditions for these loans may, in fact, be the same as a residential deal.

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Yes, I am not sure either. The mortgage insurance companies have different policies and then the banks have different, and changing polies, on top of that.

But I have heard the figure 40% if the loan is discharged within 6 months.

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Hi Skippygirl

There are various sorts of Reverse Mortgages out there. Most will lend the person a certain amount based on their age. Interest can be capitalised until they die. Then the loan is paid out of the proceeds of the estate. The loans cannot be assumed. Bluestone, MAcquarie, St George and a few others other these sorts of loans – they are becoming more popular with the lenders now.

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Hi

Sorry Skippy, I missed that bit about the land.

I think Pud’s idea is great. Get the person just to borrow against the land, that way they get the best of both worlds – ie money now and get to keep the appreciating asset.

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Good advice Fern

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Another point.

You should talk to someone at Centrelink itself. They have ‘financial advisors’ there who can help.

Also, for a recent legal case at the NSW supreme Court involving a life tenancy see Phillips v Hunt [2005] NSWSC 978:
http://caselaw.lawlink.nsw.gov.au/isysquery/irl80b9/1/doc

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Gross.

Can usually caveat, if the contract allows it. But this will not prevent the property being repossessed by the lender if the wrapper fails to pay.

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Yes, very high risk. Why can’t they get normal finance?

Check out the LVRs. What other assets do they own? If something goes wrong, you will need to start legal proceedings to get your money back. If not equity or other assets, then you could be in trouble.

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In Victoria, this is what I think happens.

First you have to give them the 14 day notice to vacate. And if they don’t leave, then you need apply to the Victorian Civil and Administrative Tribunal (VCAT) for a possession order (this can be done before the 14days). VCAT will make a legally enforceable order. You may be granted a possession order and an order that the tenant pay you rent monies owed. You can then apply for a warrant to get the police/sherrif to reposses the property. (the warrant could be up to 30 days).

If they owe you money, then send them a letter of demand. The hard part will be finding where they have moved to. Once you locate them you can begin legal action to recover your debt – eg. apply to have their wages garnished, property seized etc.

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