More people are taking out reverse mortgages for home improvement loans than ever before. The new trend appears to be affecting mainly baby boomers and older retirees who are finding that they have little other resources at hand. This has forced many to get a home improvement loan that is secured against the equity they already own in their homes.Sydney Wyde Investments and Mortgage Management (SWIMM) boss Tim Stoyle stated, “It is a real growth market and the figures we’ve seen show it is growing at 50 per cent per annum compared with previous years. A lot of older people don’t have access to any income stream and are struggling to pay bills, with the standard Government pension not enough. About four million baby boomers are nearing retirement age and compulsory superannuation at current contributions has only been around for the past 10 years or so.”He continued, “The most important rule is not to take out a lump sum against the house … A reverse mortgage is a great option provided it is taken out as an income stream because compound interest only starts at whatever you draw out. We’re tying to show that reverse mortgages are not a bad thing as long as they are used responsibly.”
Related reading: Home Improvement Loan
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