What is a reverse mortgage?
The reverse mortgage, as its name suggests, is still a loan whose guarantee is a property -mortgage guarantee- but in which, unlike a normal mortgage, no payments are made, but what is received is a collection. This difference is reflected in the fact that the debt does not decrease over time, on the contrary, it increases. When the time of death arrives, the heirs of the property will be the ones who decide to assume the debt and thereby maintain ownership of the home or, on the contrary, not accept the debt and assign ownership of the property. The fundamental requirement is that whoever contracts the reverse mortgage can be over 65 years of age or have a disability equal to or greater than 33%, severe dependency, or great dependency. It can be done on the main residence but also on any other property in which you are the owner. Finally, you can choose to collect a capital at the time of signing or the most common and how the payment of a life annuity has been marketed and continues to be marketed in Spain.What does this mortgage offer?
These characteristics define its main advantages:- Convert an illiquid asset like a home into regular payments.
- It does not entail the loss of property, you can continue living in your habitual residence until death.
- The heirs are those who are free to assume that debtor to give up the property simply by not accepting it.