New financial product will help older, cash-strapped home-owners
Retired South African homeowners can now apply for a “reverse mortgage" allowing them to borrow against the equity in their properties.
While not a new idea overseas, it's a product only recently made available in South Africa.
Called Freedom Finance it's a home equity release finance plan.
Water Financial's Chris Loker explains to CapeTalk's Refilwe Moloto how it works:
For most retirees, they have two primary assets - their pension fund and their home and very often people run short of capital and we offer the ability to tap into one of those primary assets, that being the home.Chris Loker, Founder, Water Financial
We allow people to take a monthly annuity or payment which is a form of a loan is secured by their residential asset.Chris Loker, Founder, Water Financial
It allows people to tap into the equity that they're living in and that's economically dormant.Chris Loker, Founder, Water Financial
But if you're thinking about drawing a huge lump sum and sailing off on a cruise around the world think again says Loker.
Our product just allows for a monthly payment which bolsters their pension.Chris Loker, Founder, Water Financial
Loker explains why the product is ideal for pensioners and retirees:
Most banks won't lend to people over the age of 60 or 65.Chris Loker, Founder, Water Financial
Listen to the full conversation below: