Asset --- Page: 60-61 : December 2006 Original article by Michael Rice
ABIX Summary
Many older Australians do not have enough money to retire on. Most older Australians own their family home but have little cash. To compensate for this, some choose to take out a reverse mortgage. Even those who take out an allocated pension find that it can run out after 20 years. The reverse mortgage, also called an equity release loan, is a loan taken out on the value of the family home. The loan does not have to be repaid until the house is sold. The problem is that there is high interest on such a loan and it compounds quickly. If the retiree has older children, he or she could borrow a personal loan from the bank, have the children repay it, and then leave the entire house to the children.
