Bank offers retired loans to buy in the village without selling the house first

Leanne Lazarus said many people would usually need to sell their homes to finance access to a retired village, but this can be a challenge
Photo: 123rf

A new loan is offering to help people enter a retired village without having to sell their own homes first – but there is a warning that he has a price.

Heartland Bank launched ‘Village Access Loans’, which allows people to lend a percentage of the price of a free property in the same area.

Executive -Child Leanne Lazarus said that many people usually need to sell their homes to finance this payment, but that could be a challenge when houses prices were low or it was difficult to set the sale and move.

“Village access loans give people an alternative way to finance change, allowing them to lend against equity in their home and postpone their properties at a more convenient time.”

People can lend up to 50 % of their home value to create a fixed amount for the change of retirees village. The loan was a maximum period of three years and no regular payment was necessary.

Currently, the interest rate is 9.59 %, but varies.

Liz Koh, a financial coach at Nursing Retirement, said the loan could be a good solution for people who want to move to a village, especially when the real estate market was stable.

“We saw a discrepancy between the price of houses and the price of licenses to occupy, with the last sometimes surpassing the first.

“This has been a large barrier for people that the transition, as they have watched the entrance price for retirement villages rising with the increase in construction costs, while the value of their family home has fallen or was flat while they are waiting to sell.”

She said it was often not easy to get a bank bridge finances.

“Obviously, the cost of obtaining bridge financing will need to be analyzed in relation to benefits, noting that some of the benefits such as reduced stress and greater certainty will be intangible and not monetary. As in any financial product, you will pay to get advice on whether this is the best option for your particular circumstances.”

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