Retired homeowners can apply for a ‘reverse mortgage’

Retired South Africans who own homes but are cash-strapped may now apply for a loan, or “reverse mortgage,” suggested in a recent policy paper by the World Bank as a way to supplement pension income.

The home equity release finance plan offers pensioners access to a percentage of their home’s equity while they retain full ownership. The loan is settled on sale of the house or death and interest rates are substantially lower than unsecured loans.

Termed Freedom Finance, the loan is being offered to qualifying homeowners on Cape Town’s Atlantic Seaboard initially and will later be rolled out across the country.

Source: IOL

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