If you are interested in taking out a reverse mortgage, either for yourself or for a family member, you are in the right place. Today, at Aliseda Real Estate, we tell you everything you need to know about reverse mortgages.
What is a reverse mortgage?
The Bank of Spain's Reverse Mortgage Guide defines it as: The reverse mortgage is a credit or loan guaranteed as a mortgage that falls on the primary residence. Granted at once or through periodic benefits, to a person who must be over 65.
That is to say that, broadly speaking, it is a financial product that is designed for people over 65 years of age, which allows you to convert the value of a home into a monthly income, in money.
As we mentioned at the beginning of this article, the product is limited to people over 65 years of age. Although, although it is true, people who are in a situation of great dependency can also request it.
How does a reverse mortgage work?
This is an amount of money that the bank gives you for the property that you have mortgaged, during your life. Of course, you can use the home or even rent it to a third party.
What income can be obtained with a reverse mortgage?
The amount is directly related, on the one hand, to the value of the home and the way in which you want to charge it.
There are several options to collect this rent:
- Once again, in this case the amount to be collected will be the appraisal that the bank makes of the property.
- Monthly, quarterly or semi-annual. Collecting it in installments is the most common option. In this case, the amount will depend on the value of the home and the age of the mortgage holder.
Rent a property with a reverse mortgage?
The answer is yes. The property remains the owner's property and can therefore be rented to a third party if desired. For example, if you want to sell the property, you would only have to cancel the mortgage prior to the sale.
Can it be cancelled?
Yes, it can be cancelled. In this case, the money that would have to be returned is only what the bank has lent, adding, of course, the costs of establishing the mortgage and interest.
Now, you know the most important concepts about Reverse Mortgages.
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