Hi there. A reverse mortgage is a type of home loan that allows you to keep ownership of your house whilst borrowing money using the house as security. The loan can be paid as a lump sum, a regular income stream and/or a line of credit. Interest is charged on the loan, but you do not have to make repayments while you live in the house. The loan must be repaid in full when you sell your home, move out of the home or pass away.

You said your mother has a reverse mortgage on her property. Her loan may become repayable if she moves into aged care or passes away. If you are living at the property at this time, and the property and reverse mortgage agreement is in her name only, you may find that you cannot stay at the property if it needs to be sold to repay the loan.

To accommodate this situation, some reverse mortgage agreements can be written for two people, so that, if one person dies, the other person can continue to live in the property. This would require the parties to co-own the property (i.e. both names need to be on the certificate of title). If you want to acquire a share in your mother’s property, you will need to lodge the relevant land transfer documents with NSW Land & Property Information (www.lpi.nsw.gov.au) and pay any applicable stamp duty.

Note, however, that your mother’s reverse mortgage agreement may permit her to sell half her property to you, or otherwise transfer you an interest in her property. Doing so may trigger a breach or default, making her liable to pay a penalty or fee to the lender. You should check the terms and conditions of the reverse mortgage agreement to see if changes in ownership are permitted.

More generally, reverse mortgage agreements are not available to persons under the age of 60. If you are younger than this, you may need to consider other financing arrangements for the granny flat.

Suggested way forward

Reverse mortgages and property transfers are complex areas of law. You should speak to a property lawyer to understand your legal rights and the best course of action. By pressing the “Consult a Lawyer” button, LawAdvisor can help you search for experienced lawyers and obtain fee proposals for their services. Costs for legal advice and representation will vary between providers based on experience and the scope of services.