2023-04-17 09:02:00
Mortgage a variable rate oa fixed term. Subrogation of the loan. applicable interest. Son concepts that return to the fore since the Euribor returns to have positive numbers after six years in green and, therefore, the annual reviews of the loans imply a increase in cost of the dues. There is another term that sounds again: the reverse mortgage. What is it?
The reverse mortgage is a financial operation designed for people older than 65 years. Banks do not grant loans to long term because of his age and high risk What about breach if they die From there, reverse mortgages are born: they consist of obtaining liquidity from real estate heritage.
In other words: in converting to money the value of the living place customary customer, who also does not lose the property rights. In addition, the banks grant the reverted loan at one time or through periodic payments.
However, it is when the owner dies that the bank becomes the new owner of the property. With one exception: unless the heirs pay the bank the amount that the holder received while alive.
Unlike a normal mortgage
The reverse mortgage works the other way around conventional mortgage: the credit does not decrease over time, but increases until a third party (the heirs of the property) chooses to assume it as their own.
If they are interested in maintaining home ownership, the credit can be canceled by using their own funds, refinancing the debt contracted or by selling the property.
What happens if no one assumes the debt?
In the event that the heirs do not want or cannot cancel the mortgage loan, the credit institution may foreclose on the mortgage and thus compensate itself for the overdue debts, with interest.
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However, the entity will only be able to obtain the recovery up to the extent of the assets of the inheritance, without the financial entity being able to execute the collection with other personal assets of the heirs.
Product for vulnerable people
Not only people over the age of 65 can take advantage of this banking operation: those who prove a grade of DISCAPACITY equal to or greater than 33% or a degree of dependency severe. In these two cases, the repayment of the loan is not due until the moment of his death.
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