FAQ’s

FAQ’s

At what age do I qualify for a Reverse Equity Mortgage?

65 yrs of age and upwards.

How much will I be able to leave my family?

This will depend on how much you decide to borrow, the maximum that we are able to loan, interest rates, house price inflation and how long the loan is in force. In short though, the more you borrow, the lower the likely net residual value of your property to be left to your family.

Can I pay off all or part of the loan at any time?

Although the loan is intended to be up to 5 years-long, and no payments are required for the rest of your term period, you can choose to repay all or part of the loan at any point, earlier than ordinarily anticipated. There is no lock-in, so you can settle the loan early if you so choose.

What insurance do I need to have in order to qualify?

Unlike a conventional mortgage, there is no need for you to take out life insurance in order to qualify for More2Life  . However, you do need to take out building insurance on your property in order to protect you (and us) in case, for example, the property is destroyed in a fire. We will be able to assist you in obtaining life cover should you want it together with one of our affiliated preferred FSP’s.

Who insures the property is not important to us, however, it is important to us that your cover is adequate, and that our interest in the property is noted in the policy.

Interestingly, many of our customers have shown us their existing insurance policies, which are often “tied” to the banks that extend / used to extend conventional mortgages to our customers. These practices are now out-lawed by the National Credit Act, with the effect that our customers can now place their short-term insurance where they choose, often at significantly lower premiums!

What happens to my home when I die or move into permanent long-term care?

Unless other arrangements have been made to repay the loan, the home must be sold on the borrower’s death or at the time that the borrower moves into permanent long-term care. If you have a partner by marriage, he / she can apply to take over the loan on your moving on by way of a process called “substitution of debtor”. This option is important, as it could allow your partner to continue to live in the home, if he / she wants to. The home would need to transfer to the new owner.

Can I borrow more later if I need it?

Applications for further borrowing are allowed at any time subject to our lending criteria. For further details and in-depth answers to your questions about extending your loan, please visit our website.

What age do I qualify?

65 Yrs or older. The older you are the more you will qualify for on a sliding scale according to the value of your asset.

Who will value my house?

A professional property evaluator.

What interest will I actually pay?

The interest charged on your loan will be determined by the length of your loan and your risk profile. Interest is charged on a compound basis. No actual interest payments need to be made by you.

What is a reverse mortgage?

A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that you built up over years of making mortgage payments can be paid to you. However, unlike a traditional home equity loan or second mortgage,  borrowers do not have to repay the loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage. You can also use a loan to purchase a primary residence if you are able to use cash on hand to pay the difference between the loan proceeds and the sales price plus closing costs for the property you are purchasing.

What types of homes are eligible?

Free standing or sectional title homes. You need to live in the house as a primary residence, maintain your home and keep your rates and taxes up to date.

Will we have an estate that we can leave to heirs?

When the home is sold or no longer used as a primary residence, the cash, interest, and other finance charges must be repaid. All proceeds beyond the amount owed belong to your spouse or estate. This means any remaining equity can be transferred to heirs. No debt is passed along to the estate or heirs.

How much money can I get from my home?

The amount varies by borrower and depends on:

  • Age of the youngest borrower or eligible non-borrowing spouse
  • Current interest rate; and
  • Fees

If there is more than one borrower and no eligible non-borrowing spouse, the age of the youngest borrower is used to determine the amount you can borrow.

Special Requirements

Are there any special requirements to get a reverse mortgage?

You must own a home, be at least 65, and have enough equity in your home. There are no medical requirements.

Lenders must conduct a financial assessment of every reverse mortgage borrower to ensure he or she has the financial capacity to continue paying mandatory obligations, such as property taxes and homeowner’s insurance, as stipulated in the Loan Agreement.

If a lender determines that a borrower may not be able to keep up with property taxes and homeowner’s insurance payments, they will be authorized to set-aside a certain amount of funds from the loan to pay future charges.

Existing Mortgage

What if I have an existing mortgage?

You may qualify for a reverse mortgage even if you still owe money on an existing mortgage. We would settle your current mortgage and I would be added to your More2Life account.

Rejecting a Reverse Mortgage

Under what circumstances should I not consider a reverse mortgage?

Because of the upfront costs associated with a reverse mortgage, if you intend to leave your home within 2 to 3 years, there may be other less expensive options to consider, such as home equity loans, no-interest loans or grants that may be offered by your county government or a local non-profit to repair your home, or a tax deferral program, if you’re having problems paying your property taxes. Also, if you want to leave your home to your children, then you should consider other options, because in many cases, the home is sold to pay back a reverse mortgage.

Property Taxes

Do I have to pay my property taxes?

Yes, it is your responsibility to ensure that your property taxes are paid in a timely manner. Failure to keep your property taxes current is considered a DEFAULT in the terms of your Loan Agreement and may be grounds for calling your loan due and payable.

Maturity

What is a maturity event?

A maturity event is any event which may cause your reverse mortgage to be called due and payable. Once a loan has reached a maturity event, then no additional funds may be advanced from the reverse mortgage. Such maturity events include:

  1. All borrowers have passed away
  2. All borrowers have sold or conveyed title of the property to a third party
  3. The property is no longer the principal residence of at least one borrower for reasons other than death
  4. The borrower does not maintain the property as principal residence for a period exceeding 12 months because of physical or mental illness
  5. Borrower fails to pay property taxes and/or insurance and all attempts to rectify the situation have been exhausted
  6. The property is in disrepair and the borrower has refused or is unable to repair the property.

Payoffs

Can I pay off my reverse mortgage before a maturity event is reached?

Yes. You can pay your reverse mortgage in full at any time during the term of your reverse mortgage.

How long will my estate have to pay off the reverse mortgage once it has been called due and payable?

The reverse mortgage is to be paid in full once it has been called due and payable. You and/or your estate must work closely with your loan servicer to ensure your reverse mortgage is paid in full in a timely manner. If arrangements to pay the reverse mortgage are not made with your loan servicer, then your loan servicer may proceed with foreclosure between 30 days and six months from when your loan has been called due and payable. If you or your estate are actively working to either refinance your property or sell your property so as to satisfy your reverse mortgage, then foreclosure maybe forestalled.

 

0861 4777 47info@more2life.co.za202 Grove Exchange
Grove Avenue
Claremont
7735