What our customers say about us

Thanks for all your help and for making it so easy for me. Life will be so different now.

Jan Vincent
Montrose, VICTORIA

Thank you very much for the service you provided us regarding the refinance of our home loan. All went well and smoothly with no problems. We are happy with the new loan arrangement. Once again, thank you very much for your assistance.

Bala Krishna
Cranbourne VICTORIA

We have found Barry Le Brocq of Melbourne Mortgage Finance to be very patient, caring and diligent in achieving a successful outcome to our refinancing requirement. We have no hesitation in recommending his services to others.

Don & Christine Perrett
Leongatha, VICTORIA

Many thanks Barry for the exceptional service that you have provided. We will most certainly be recommending you to our daughter (Bank of Melbourne branch manager) for any future customers who need a reverse mortgage loan.

Paul & Barb Spark
Somerville VICTORIA

 

LENDING UPDATE 24.09.18

  • Product of the month : 3.62% fixed for 2 years
  • Tips for First Home Buyers
  • A reverse mortgage loan can fund an Aged Care bond
  • If your bank says “No”, alternative lenders are available
  • Use a Deposit Bond when cash is not available

What is an Accommodation Bond?

An Accommodation Bond is an amount paid to an aged care provider so seniors can gain entry to an aged care facility. It is basically an interest-free loan that the resident makes available to the aged care provider, the bulk of which must be repaid by the provider when the resident leaves the home or passes away.
Depending on the facility, an Accommodation Bond charge may range from $130,000 to over $400,000. It is designed to cover the cost of gaining access to the facility.

Funding an Accommodation Bond for aged care has usually involves selling the family home. A simple and effective alternative is now available. Accommodation Bonds can usually be arranged within three weeks, allowing the home to be retained by the family.

Historically, in order to raise the funds for a bond, the family home has often had to be sold. This is a difficult decision and will inevitably cause stress if a forced sale has to be made quickly. Many seniors are now aware that they can access some of the equity in their home by arranging a reverse mortgage to meet the accommodation bond requirements of many aged care facilities. This means that the family home, which will usually increase in value, does not need to be sold and can be retained for beneficiaries.

Yes. From 1st July 2005 , the principal home has been exempted indefinitely where pensioners:

  • pay all or some of the accommodation bond by periodic payments, and
  • rent out their former home

Accommodation bonds which are structured correctly to allow part payment as a lump sum (from reverse mortgage finance) and part payment by periodic payment now result in neither the home nor the bond amount itself being regarded as assets under the Assets Test. The rental income is also not regarded as income under the Income Test.

Seniors entering low-level care or extra service places can raise funds in a variety of ways without being forced to sell their home, including :

  • use of some of their own cash reserves
  • use of the rent from their home
  • use of the proceeds from a reverse mortgage taken out on the home,
  • or a combination of all three

Yes. The new rules allow your residence to be rented to a family member at reduced or preferential rates, although reduced rates make it more difficult for seniors to cover the cost of finance borrowed on a reverse mortgage for the purpose of funding aged care.

There are several reasons why this solution may be attractive :

  • a better quality place may be available for seniors if additional borrowed funds can be found
  • seniors continue to own their home and have more choices what to do with it, including renting it out to generate additional income and capital growth, allow family members to occupy it or arrange a more orderly sale without rushing.
  • seniors can move back into their home if they wish
  • there is no obligation to repay the loan until the property is sold, vacated or seniors pass away.
  • the family home is a valuable appreciating asset and stays in the family
  • because the accommodation bond is now Assets Test exempt and the home remains Assets Test exempt for a period of time, together with any rental income generated from the home while it is exempt, seniors are able to retain their Centrelink entitlements for longer

There are several basic criteria which seniors need to satisfy to be eligible for a reverse mortgage accommodation bond:

  • the minimum age is generally 60, although some lenders have a minimum age of 70
  • seniors must own the property either as sole owner or jointly with your partner
  • you must not continue to reside in the property. The reverse mortgage is to finance an accommodation bond into aged care. The house can be rented out or have other family members occupy it.
  • the location of the home must be in a postcode area acceptable to the lender

Some reverse mortgage lenders make no distinction between lending for an accommodation bond and lending for other purposes. For example , seniors aged 70 can borrow 25% of the value of the property using normal reverse mortgage finance. This may not be enough. Other lenders will allow seniors to borrow up to 50% of the property’s value immediately provided you are over 60. There are different terms and conditions however, as these products are specifically tailored to the needs of seniors requiring aged care.

Yes. Reverse mortgages can be taken as lump sum cash and monthly income combined. This will suit seniors who wish to raise most of the bond in cash, but pay some of the bond off in the form of monthly periodic payments. This is the basic structure required under recent changes which allow valuable exemptions to seniors under both the Assets Test and Income Test as described above.

Yes. This could be done when the bond is returned to you after you move out of aged care. Seniors should be aware, however, that their lender may be entitled to charge Early Repayment Fees for a voluntary early repayment of the loan. Also, lenders may be entitled to charge “break costs” if a fixed rate bond loan is repaid prior to the agreed fixed rate loan period, particularly if fixed rates are lower at the time of repayment than the fixed rate you agreed to at the start.

Yes. This is a complex area of financial planning and expert financial advice is essential. Reverse mortgages are more frequently being used to finance entry into aged care when accommodation bonds are required. Circumstances of borrowers and their families are all different and specific advice relating to your needs should be obtained.

Most reverse mortgage lenders will require the reverse mortgage accommodation bond loan to be repaid within 12 months from the time of your death. If the property is sold, the loan will be fully repaid. Your executors may decide may keep the property. They will then recover the net proceeds of the bond and repay the bulk of the bond loan. If there are insufficient net proceeds available, the executors may decide to arrange their own loan to clear the reverse mortgage loan fully.

Melbourne Mortgage Finance offers an extensive range of mortgage products and services including

Home Loans, Investment Loans, Equity Access Loans, Low Doc Loans, 100% Loans, Refinance Loans, Commercial Loans, Deposit Bonds, Reverse Mortgages, Accommodation Bonds, Vehicle Finance, Plant and Equipment Finance, Financial Planning and Business Finance.

IMMEDIATE appointment can be made to meet at your home or office

  • NO CHARGE for assisting you. We receive a standard fee from the lender you select
  • reliable service, communication and follow-up. See “Testimonials
  • accreditation with 20 national lenders, allowing you to select from an excellent range of loans
  • we carefully listen to your needs, do our research, then present you with a short-list of three potential loan solutions. You choose the lender.
  • printouts of products, fees, interest rate and loan features are provided
  • arrange for your property insurance and personal insurance requirements to be assessed
  • ongoing availability to assist you after loan settlement
  • over 30 years experience in arranging finance and mortgage loans