There is no difference for older home loan applicants who are not retired and still earning an income. 

However, retired seniors who do not have an income would be able to use the equity in their home to apply for a reverse mortgage.

Most lenders offer a variety of loan products with the most common being the Reverse Mortgage.  This allows you to access part of the equity in your home (usually around 25% - 40%) and use the cash now.  Whether you are renovating your home, paying for an operation, paying for a holiday or investing the money, you can borrow an amount to suit your needs.  No repayments are necessary and the costs associated with the loan such as interest are simply added on to the balance owing.  This means you will be paying interest on interest and the loan balance will increase over time.  This is called "interest capitalisation".

You must own your home outright to be eligible and the younger you are the less you can borrow.  You are entitled to take the loan money either in a lump sum, or it can be paid monthly, or a combination of the two.

The loan is only repaid either when the property is sold, the borrowers no longer live in the home, or all borrowers are deceased.  Usually the loan is repaid through the sale of the property, or possibly by children or beneficiaries paying the loan out by refinancing.  If you wish however, you may make payments on the loan at any time.

Reverse mortgages can be a great way to access extra money using the equity of your home, while still enjoying the benefits of living there.  However, be aware that interest rates are usually higher than for a regular home loan, and the interest can build up quite quickly so you need to think about your future financial situation.  Also be careful that your pension is not at risk from any assets you accumulate using the money from the loan.

To discuss the loan products that are currently available please contact Your Local Finance Broker today.