The Reverse Mortgage Law

by HFCadmin ·

A reverse mortgage is a new financial product, a credit for over 65 years, mostly homeowners who want to convert the value of your property in a monthly income for life. Adopted by the Council of Ministers on 2 March, the draft law regulating the figure of the reverse mortgage was approved by the Senate Economics Committee this week to be submitted to Congress. One of the innovations introduced in its passage through the Senate has been the expansion of housing types that could benefit from this form of credit, because until then could only apply this standard residential mortgage. According to the text, the reverse mortgage is a loan or credit secured by mortgage on real property that constitutes the main residence of the applicant and provided they meet certain requirements. As mentioned above, are also present in this definition are unusual homes. The requirements to be met by the applicant are the following: Be 65 or more years or be affected by severe dependence.

The debtor will have the amount of the loan through periodic provisions. The debt is only callable by the creditor. The property must be taxed and insured against damage. The loan amount will depend on two factors: the applicant’s age and value of property valuation. In addition, this property will not change when the owner dies. Then, the heirs, in turn, may, if so required by the contract, and pay off the loan to the entity’s outstanding debt plus interest, to meet the credit they have left their families in order to keep the house negotiate with another bank refinancing rate for the property or enforce the claim and recover the remaining amount on the appraised price, if they have negotiated an annuity. Currently, financial institutions that offer this mortgage distinguish several options, depending on maturity, be it limited or lifetime. The latter receive a monthly payment is lower but with the advantage that the recipient will receive while the holder of the mortgage alive.


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