We help you get your reverse mortgage in Malaga in the best conditions. We are in charge of filtering the mortgage market and negotiating directly with each entity to ensure the best conditions.
We process your Reverse Mortgage
We process your reverse mortgage Free if you buy with us.
We take care of everything for you to save you time and money. We assign you a personal advisor who will accompany you throughout the process and will keep you informed of each step.
Request your free financial advice and we will inform you of all the steps and requirements to obtain your reverse mortgage.
We will advise you on the conditions of your mortgage, installment, term and everything you need for your peace of mind. Our advice is completely free and is focused on guiding our clients.
Steps to get a Reverse Mortgage
We explain the steps so that our advisors can get you the best reverse mortgage:
- Financial advice: We prepare your profile to indicate the requirements and conditions of the mortgage.
- Submit the mortgage: We present your mortgage in different banking entities in your name according to your needs.
- Negotiation of conditions: Once we have a response from all the banks, we negotiate directly with each one to lower the interest rate and ensure the best conditions.
- Choose your mortgage: All bank offers will be presented and explained to you so that you can choose the mortgage you want.
- Appraisal: We manage and accompany the appraiser.
- Accompaniment to notary: On the day of signing before a notary, you will be accompanied by your personal advisor as throughout the process.
Other Reverse Mortgage Options
FREE FINANCIAL ADVICE
Advantages and disadvantages of a reverse mortgage
Advantage
- You maintain your house: You will be able to continue living in your current house as the owner.
- Value for your heirs: After payment of the debt, if there is any surplus, it will be for the heirs.
Disadvantages
The amount of money you will charge will not be very high, as we have explained above. That is, you will not be able to live off what they pay you for the reverse mortgage.
You will have difficulties selling the home, because you can only do it if you can pay off the debt with what you earn from the sale.
Your heirs can be left without your house if they cannot pay off the debt you have incurred with the reverse mortgage. Additionally, if the sale or seizure of the home does not cover all the debt, the entity may seize more assets from your inheritance.
Requirements to request a Reverse Mortgage
As we have already explained, you can only hire one of these products if you have a very particular profile. These are the requirements that you must meet:
- Own a home. It can be a house or an apartment, your habitual residence or a second home... In any case, it must be free of charge, that is, it cannot be mortgaged. If you paid off your mortgage a long time ago, but have not yet registered it, below we explain how to carry out this procedure.
- Being an elderly, disabled or dependent person. You will be considered if you meet one of these requirements:
- If you are 65 years old or older, although we know that there are entities that raise that age to 70 years.
- If you are 65 years old or older and suffer from a disability equal to or greater than 33%
- If you have severe dependence or great dependence. In this case, it doesn't matter how old you are.
The entity that grants you the reverse mortgage Your level of income and your financial solvency will not matter., so it will not ask you to justify your income or present guarantees. Keep in mind that he expects to get his money back when you die, as we will explain later.
What is a Reverse Mortgage?
The Reverse Mortgage is a mortgage loan that allows people over 65 years of age to obtain, with the guarantee of their home, a monthly subscription with which you can supplement your income for a certain period of time, with the possibility of receiving these payments throughout life.
After the death of all the owners, the heirs will have a period of time to return the total amount owed, with the option of canceling it with the sale of the home or keeping the house by paying off the debt.
A reverse mortgage It is a type of mortgage loan in which The bank pays a monthly rent to the client in exchange for them offering their home as collateral.. In a very summary way, it works in the opposite way to a normal mortgage.
In general, this reverse mortgage is especially aimed at clients over 65 years of age (although depending on the bank the age can be up to 70 years) who already own a home. In exchange for mortgaging your home, The owner will receive a monthly income that can be temporary, for life or a one-time provision, depending on what you have contracted.
In the case of the temporary reverse mortgage will be perceived monthly fee for the period of time set in the contract. The total amount to be received with this reverse mortgage will be equivalent to the value of the home, so this type of mortgage provides a monthly payment greater than for life, as it has a limited duration. However, once the value of the home has been covered, the rent will no longer be received. In this type of reverse mortgage, income is not taxed on personal income tax.
For its part, the lifetime reverse mortgage guarantees a monthly income for the life of the mortgage holder. Since there is no expiration date, the monthly income received is less than in a temporary reverse mortgage. In addition, this type of loan may have annuity insurance that would be activated at the time when the income received by the owner exceeds the maximum value of the mortgage.
If you hire a single draw reverse mortgage will be received a single payment based on the appraised value of the home at the beginning of the mortgage.
It is important to note that once the value of the home has been consumed through monthly income the use of it would not be lost. In addition, there may be more than one owner of the reverse mortgage, so it will only expire, if it is for life or if the agreed term has not been met, when both owners have died.
As to The repayment of the mortgage loan will be borne by the heirs, who must decide between selling the property and paying the remaining debt, paying the debt with their own funds or, if they cannot do so, taking out a new mortgage to pay the outstanding debt.
A reverse mortgage, as its name indicates, works the opposite of a normal mortgage. That is, instead of borrowing money to buy a house, what you do is Mortgage your home so that an entity pays you money for a period of time. They are products aimed exclusively at people over 65 years of age or dependents who want to collect an “extra” to complement their pension.
Depending on the term over which the money is collected, reverse mortgages can be two types:
- Simple Reverse Mortgage: In this case, the client and the entity agree on the period during which the second will pay installments to the first. When that period ends, which is usually between 15 and 20 years, the client will stop collecting rent.
- Reverse Mortgage with Deferred Annuity Insurance: In this case, the client will collect fees until he dies. Now, the amount of these rents will be lower, because you will collect them for a longer time.
How does a reverse mortgage work?
While in one traditional mortgage You, as a client, receive the total amount of the loan from the bank and make monthly payments to amortize the debt, with With the Reverse Mortgage you will be guaranteed a monthly payment that you will not have to pay back during your lifetime. After death, your heirs will have to repay the loan and its interest.
The monthly amounts received through the Reverse Mortgage, until the set term, They are not subject to Personal Income Tax (IRPF).
Furthermore, this monthly income It can be an additional complement to other income you may be receiving such as, for example, pension or other funds; and the loan can be paid off early if you wish.
WHO CAN APPLY FOR A REVERSE MORTGAGE
- People over 65 years of age.
- Homeowners.
- Without other mortgages or charges on the property.
Other important factors to obtain a Reverse Mortgage
If you meet the requirements that we have detailed above, you will be able to process your application with an entity that grants reverse mortgages. The first thing this will do is give you a Pre-contractual Information Sheet or FIPRE, in which you can consult the generic conditions that it usually offers to those who order these products. He will also advise you: he will answer your questions about these mortgages and explain their pros and cons.
If you are interested in their conditions, you will have to present a copy of your DNI (your age appears there) or the documentation that certifies your disabled or dependent status, in addition to the simple note of your home to prove that it is yours. You must also order an appraisal of your house from an appraiser approved by the Bank of Spain and provide it to the entity, which will need to know the value of the home to determine how much it will pay you.
The entity will send these documents to its analysis department, which will study your request. If you approve it, you will be given the binding offer with the final conditions. If you agree with its terms, you will only have to sign the reverse mortgage before a notary. If you do not completely agree, improving these conditions will be very difficult, because entities are not usually open to negotiating. In any case, you have nothing to lose by trying: you already have the no.
Once the reverse mortgage is signed, your home will be officially mortgaged and The entity will pay you the amount you have agreed upon, either all at once or in rent or monthly installments. Please note that it won't be much money, because only between 20% and 30% of the home is usually mortgaged (up to 60% in exceptional cases).
Let's give you an example so you can see how much you could charge approximately. Let's say you mortgage 22.50% of a 250,000 euro house. In this case, you could collect 56,250 euros at once or monthly payments of 135 euros until you die.
As soon as you die (or all the holders of the reverse mortgage die, if there is more than one), the debt will pass to your heirs. That is, your heirs will have to return to the entity everything it has paid you plus the interest that has been generated until your death (interest is usually 5% per year).
This is what your heirs can do if they accept the inheritance:
- Keep the home, in which case they will have to pay off the debt with the bank. They can do it all at once, if they have enough money, or they can take out a new mortgage on the property to refinance that debt.
- sell the house and pay off the debt with the money obtained after its sale.
- Not paying off the debt. In this case, the entity will seize the home and auction it to recover the money. This embargo will also occur if you have no known heirs or all of them reject the inheritance. If the auction of the house is not enough to pay off the debt, the entity may also seize part of your inheritance until it is completely settled.
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