23rd of October 2018
Financial Freedom – How Homesafe Wealth Release is Helping Australians Enjoy a Secure Retirement
It should be straightforward: you toil hard throughout your working life, make sound choices and eventually retire with enough set aside to get you through the rest of your days comfortably. Perhaps you might even be able to leave a little something for the kids. There was a time where this was a scenario to which most Australians could look forward. Today’s harsh reality is that 60% of current retirees face the prospect of running out of savings to live on. The outlook is even bleaker for the future. Two-thirds of current working families have less than 3-months’ income in savings, while a staggering 1 in 10 Australians would not be able to survive for even a month on what they have set aside. These are sobering figures and pose numerous economic and social dilemmas for families and lawmakers alike.
A volatile real estate marker, increasing living costs, stagnant wages growth, a culture of excessive spending and a host of other factors conspire to make Australia a country with one of the lowest rates of household savings in the developed world. If you’re looking forward to a secure retirement free from financial stress, this is a matter of immense concern.
Family home as a store of wealth
For those people in Australia fortunate enough to own their home, it has become increasingly common for the ‘roof over their head’ to be the most valuable asset they own. It is also the asset they hope will grow in value and provide equity to assist them through their post-retirement lives. Those wishing to keep their houses face the dilemma of maintaining ownership while securing sufficient liquid funds to live day-to-day. Limited options are available to access this equity whilst still remaining in the home and avoiding the need to downsize. Reverse Mortgages or borrowing from family and friends are usually the options of last resort. Despite government mandated negative equity protection (assurance that you will never have to pay back more than the value of your home), reverse mortgages still come with significant downsides and can leave retiring individuals or couples worse off than when they started.
Debt Free Equity Release – A Better Option
Homesafe Wealth Release was developed to provide an alternative for over 60s looking to sidestep the often fraught, inequitable relationship, between lenders and borrowers, as can be found with reverse mortgages. This is made possible by the fact that debt free equity release is not a loan. This will come as a great relief to many who find the prospect of accumulating substantial debt later in life, or passing it on to their heirs, unpalatable. Rather, Homesafe Wealth Release customers are merely exchanging a share of the sale value of their home in the future when they sell, for a lump sum cash amount today.
So, how does it work? It’s simple:
- You sell a share of the future sale value of your home to Homesafe for an upfront, lump-sum payment that you can use to support your lifestyle.
- The lump-sum amount today is determined by Homesafe based on numerous factors, such as:
- The size of the future share being sold
- The current value of the home
- Your age today
- When the house is sold, whether in your lifetime or after you pass away,, Homesafe receives the agreed percentage of the sale value.
- If you sell the home earlier than anticipated, you may receive a rebate which is deducted from Homesafe’s share, providing you with greater equity upon settlement.
- At any time, you can buy back the sold share without penalties.
Why Debt Free Equity Release is the Most Certain Way to Fund Your Retirement
Now that we’ve determined what Homesafe Wealth Release is, let’s look at what it isn’t:
- It is not a transfer of ownership. You continue to own your own home.
- It is not a loan. There are no accumulated interest payments or charges that can leave you and your family saddled with unmanageable debt in future years.
- It is not a transfer of control. You continue to decide what happens to your property as long as you own it. Whether you continue to live in it, rent it out or move into a care facility is your choice. Homesafe only becomes involved when it’s time to sell.
- It is not a gamble. No matter how long you retain ownership of your home or how its value or market interest rates fluctuate, the share of the value sold to Homesafe remains the same and can never increase.
- You won’t be penalised for selling early. In fact, as mentioned above, the share that you retain will actually increase if you sell your home sooner than expected.
If that sounds like it might be the right option for you and your family, then perhaps the time is right to give Homesafe a call and see whether you are eligible for our Homesafe Wealth Release solution.
We believe it is the safest and most certain way to secure your financial future in an uncertain economic world.