A reverse mortgage is also referred to as a reverse mortgage and is particularly suitable for older people of retirement age who own property. They can sell the property with a lifetime easement on it and have an agreed annuity paid to them. It is also called a mortgage for the elderly.
When you say reverse mortgage
With a conventional mortgage, you borrow money to buy your own property. You then pay the bank the agreed repayment each month, including interest, and the property serves as collateral. However, a reverse mortgage can only be obtained by someone who owns a property.
How to get a reverse mortgage?
Elderly people who cannot sell their property because they have nowhere to live but do not have the money to maintain it, or who want to add to their pension, can apply for a reverse mortgage.
When you apply, you must provide proof of your income, household expenses, an appraisal of the property and proof of how you acquired the property. Some banks may also ask for a doctor’s certificate about your health. When everything is in order, you will sign the contract, transfer the title to the lender, and the lien will also be registered in the land registry. However, you remain the owner of the property.
Once the land register is registered, you will be paid the agreed amount, either in one lump sum or in regular monthly instalments.
When is the reverse mortgage loan due?
- The moment the owner sells the apartment or house.
- Moves out.
- The last owner dies.
- The house or apartment is unoccupied for more than six months.
- The owners do not pay the bills associated with the property properly or fail to meet other obligations.