Another selection of quality reverse mortgage products is offerred by Vision Equity Living, one of Australia’s premier non-bank lenders. As proof of their product’s quality, in January 2008, Money magazine awarded Vision Equity Living a silver medal in the Best Reverse Mortgage (Non-Bank) category of their annual competition, and the product received a four-star rating from CANNEX in their inaugural October 2007 ratings report for the industry.

As a full member of Senior Australians Equity Release Association of Lenders (SEQUAL), Vision Equity Release must adhere to a strict code of ethics and behaviour designed to protect prospective borrowers. Amongst other requirements, this includes ensuring prospective borrowers acquire independent legal and financial advice prior to entering into any loan, and the guarantee of no negative equity is ironclad against almost any action short of fraud or willful negligence on the part of the borrower.

The requirement that borrowers obtain independent financial advice is designed to ensure that Centrelink benefits are not jeopardised by the income generated by a reverse mortgage, and that the borrowers’ long-term financial needs are protected.

Vision Equity Living offers two basic reverse mortgage products, the Lifestyle Plan and the Freedom Plan. These two products are then subdivided according to whether an income stream, lump sum, or combination payout is preferred. The lump sum plan may carry a fixed or variable interest rate; however, the income stream, payable weekly, fortnightly, or monthly, over a set number of years between five and twenty, or until the percentage of available equity is fully utilised, is available only with a variable interest rate. Neither package appears to be available as a line of credit that can be arranged but left unused until required.

The minimum loan amount for the lump sum packages is currently $10,000, with a minimum of $200 per month withdrawn required for the income plans; there is no maximum limit. The Lifestyle Plan can protect up to 25% of the home’s equity from repayment of the loan upon discharge, with an LVR between 15% and 50% of the property’s value, increasing with the age of the youngest borrower to 95; the Freedom Plan can protect up to 20% of the home’s equity, with LVR ranging from 15% to 40% of the property’s value, also increasing with age to 85.

Vision Equity Living offers a portability option should the borrower move house. In addition, should the borrower still be paying on a standard mortgage, a lump sum can be drawn from the available equity to discharge it.

Although no repayment is required, principal reductions are allowed; however, break fees may apply, particularly within the first five years of the loan. The final amount of the loan is withdrawn from the proceeds upon the eventual sale of the property.

Vision Equity Living charges no ongoing maintenance fee. Valuations are required every three years. A current special offer waives the application fee, a saving of $695. The home owner is of course required to maintain the property to preserve its market value, retain sufficient household insurance, and see that all rates and taxes are paid.