What is a No Negative Equity Guarantee?

Reverse mortgage lenders generally incorporate a “No Negative Equity” guarantee into their loan contracts. That is, the lender assures the borrower that, if the borrower adheres to the terms of the loan contract, neither the borrower nor the estate can ever owe more than the sale value of the home.

It is unlikely that the loan balance would exceed the value of the home in the future. For example, if you borrowed the maximum loan amount, if you lived longer than expected and if your property value does not increase sufficiently, then you could possibly end up with negative equity. This is unlikely to occur, so most lenders are willing to offer a guarantee.

It is essential that your lender includes a “No Negative Equity” guarantee in the loan contract. Some lenders have guarantees which are subject to certain requirements. You should be aware of any requirements or conditions which may negate the guarantee and discuss these with your solicitor.

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 for your time on the phone yesterday and copying me into the below email.
I just wanted to take the time to say that I have never seen such a comprehensive email provided to clients by a Broker before. Very clear and detailed.
I hope it’s ok that I hold onto your details to refer to clients who may need assistance.
Kind Regards,

Shannon Oatley
Director & Licensed Conveyancer
Property Conveyancing Group, 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 14.06.19

  • LIVING EXPENSES ARE NOW A KEY ISSUE
  • COMPREHENSIVE CREDIT REPORTING NOW IN EFFECT
  • INVESTMENT LOANS AT OWNER-OCCUPIER INTEREST RATES
  • REVERSE MORTGAGE LOANS FOR SENIORS OVER 60
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