How a reverse mortgage works
We’re sure you know how traditional mortgages work. However, in case you do not know it, we encourage you to visit our blog to learn how it works. However, in this entry we want to introduce you to the reverse mortgage. As its name suggests, it works in the opposite way to a normal mortgage. But what does this mean?
Especially aimed at people over 65 years of age
In general terms, a reverse mortgage is aimed at clients whose age is equal to or greater than 65 years. However, you will have to check this detail with the bank since this figure may vary. The condition is that the owner has a home that he will mortgage in exchange for receiving a monthly income that will be temporary, for life or for a single use strong>, depending on the contract established with the bank.
What homes are banks interested in?
At this point it is important to know that not all homes play in the same division. That is, not everyone is eligible to obtain a reverse mortgage. In this sense, the value of the house has to be high enough for the bank to be interested. The properties that financial institutions tend to be most interested in are those located in better areas or that have characteristics that make them stand out above the rest. It is important that you know this information as a premise to continue with the process.
What economic value does a reverse mortgage provide
Generally, entities deliver between 25% and 50% of the value of the house given as collateral. Although this percentage is conditioned by both the age of the person requesting the mortgage and the type of home and its condition. Therefore, the amount received by the recipient is usually not very high and is usually conceived as a “complement” to the pension. Be that as it may, each personal case is studied by the financial institution to stipulate what this percentage will be.
Do you have more questions? We will be happy to help you resolve any issue.