There has already been a lot of controversy around the reverse mortgage. Discussions are conducted on internet forums or in the press. What is the reverse mortgage really about and can it be beneficial? In an inverted mortgage, the bank pays (once or in installments) to the consumer a benefit for “giving away” the consumer good – usually for the waiver of rights to an apartment, house or building plot. List of online loans in the largest financial statement.
How does it look in practice?The client rewrites the rights to housing on the bank. Of course, he can still live in this apartment – in fact it is his for the rest of his life. The bank pays the remuneration specified in the contract to the client every month. When the customer dies, all saved assets become automatically the property of the bank. So the bank can sell the flat. Reverse mortgage is primarily dedicated to older people, pensioners, who can thus improve their home budget. As you can see, the bank undertakes to pay a monthly “salary” in exchange for the possibility of taking over the apartment after the death of the client. Adapt a loan without a loan to your expectations. The amount of the bank benefit depends, of course, on the value of the good – you can count on a house offering a house than a 2-room flat. Either way, the customer can count on the fact that he will have an additional cash injection for the rest of his life (it is also possible to pay the whole amount at once). There are voices that banks are preying on their clients’ misfortunes and taking advantage of their difficult situation. In most cases, banks repay approximately 30-40% of the property value before the client dies. What a free loan for the first time looks like. This means that after selling the apartments, they do not achieve low profit (approx. 60%). On the other hand, however, customers know what an inverted mortgage is and make such a decision for reasons known to them. A reverse mortgage gives them peace and security that they will be able to afford their daily needs and will be able to live in their home for the rest of their lives.
They certainly gain mental comfort on such a solutionMany people are appalled that a client’s apartment should be available to his family after his death. Check the payday rankings on the wallet website. But what about childless people or those who do not have good relations with loved ones? In addition, sometimes an inverted mortgage is the only solution for the poor or the sick (the need to buy expensive medicines). The bank cannot “expel” the client from the apartment and must pay him regularly – so the client’s interests are secured.
Who can apply for an inverted mortgage?By law, this financial instrument is available to owners and co-owners of real estate or the cooperative ownership right to premises or the right to perpetual usufruct of land, regardless of age. In practice, banks grant such loans primarily to persons over 60 years of age. A person using a reverse mortgage must:
- keep the property in good condition,
- pay real estate fees and taxes,
- insure the property against random events.