Mortgage annuity loan: what to know
Do you need to get new liquidity? With the lifetime mortgage loan your home becomes an ATM. What I mean? Simple, your home is your parachute. In other words, it guarantees the bank the return of the loan. Accessing this financial instrument is now easier. The law 44/2015 of May 6 has made it clearer about its operation.
The most important news concerns property owners: access to credit is allowed from 60 years of age . A net change compared to the past. Already, before the minimum age required to obtain this loan was 65 years.
Like the sale of the fifth , you will have realized that the mortgage loan for life represents a resource especially for the elderly . Men and women who are old and need money but do not have any other good outside their home.
Let’s go to the point, here’s what to know about the mortgage loan.
How the Mortgage Loan Works
the mortgage life loan – as I told you before – is aimed at over 60s and allows you to transform part of the property value into cash . This way you can get liquidity without having to sell the property. In other words, it is an overturned mortgage . Turn on the loan in favor of the bank in exchange for the mortgage on your home.
But how much money can you get from financing? Well, I tell you right away that the cash you can get varies based on the market value of the home. The sum issued is also influenced by the applicant ‘s age and life expectancy . In general, the higher the age of the contractor, the greater the amount granted by the bank or financial intermediary.
Before talking about reimbursement, I will immediately clarify the interest issue. The mortgage life loan behaves like other mortgages. In practice, the interest rate applied to the amount disbursed can be fixed or variable and will be established by the credit market.
As for the repayment of the loan, this can be done gradually. You can agree on times and ways with the credit institution and you no longer have to worry about the annual capitalization of the interests. Pay attention, the delayed payment of the installments (between 30 and 180 days), occurring at least seven times even if not consecutive, gives the bank the right to request the termination of the contract.
In the event that the bank does not find an agreement with the contractor for a gradual repayment, the law provides for three cases of full repayment in a single payment :
- Death of the person who requested and obtained the loan
- Property sale
- The bank must have a full repayment of the loan even if acts occur that reduce the value of the property , for example a new mortgage.
And what happens if the reimbursement does not take place even though at least one of these three cases has occurred? The legislation speaks clearly: “If the loan is not fully repaid within twelve months of the occurrence of events, the lender sells the property at a value equal to the market value”. I tell you more: the bank reduces the value of the house by 15% every twelve months until the time of sale. Subsequently the bank uses the sums obtained to extinguish the credit.
Is it ultimately a cheap loan?
The answer is yes. The mortgage life loan only pledges a portion of the property that can be repurchased by family members. In this way the silent is extinguished and the immovable returns in the hands of the legitimate owners.