Dateline New Zeland: Reverse Mortgage Trouble Down Under
new zealand
American seniors are not the only people feeling the squeeze of their home equity. A friend of mine from New Zeland sent me this article, regarding the financial troubles occuring there.
As property prices continue to fall, some home owners with reverse mortgages are starting to feel a little nervous.
A reverse mortgage allows senior citizens to borrow money against that equity in their home, which is then repaid when they either sell up or die.
Derek Hughes from Mortgage Link Kapiti has had a few calls from concerned clients who are seeing the value of their home drop, and their equity go with it.
He says as most people don’t borrow more than 45% of their equity, in theory it should not be a problem. But he says with the high interest rates over the last year, people who have borrowed to the limit will be getting a little concerned about how far property prices might fall.
Hughes says in the last six months interest in the loans has really dropped off.
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