What benefits does a reverse mortgage have for seniors who want to obtain an annuity without selling their home?
To do this, we must consider as the main aspect that the average lifespan of people has been increasing, therefore, the cost of living for older people also increases, as is the case of retirees, pensioners or investors who try to day Every day they maintain their status in life, which is also increasingly difficult to maintain.
The main benefit that the reverse mortgage business offers us is being able to provide older adults with various resources so that they can continue to preserve and maintain their lifestyle for their final years, and that in turn, they can, -until the day of their death- continue living in their homes, taking into account that the debt generated as a result of the reverse mortgage carried out will be paid at the time of their death, which is the moment in which the creditor may request the collection of your credit.
What requirements and conditions must be met to access a reverse mortgage in Argentina?
Currently, there are no reverse mortgage contracts, however, which, from our perspective, we think that what has to be provided – through said businesses – is legal security to whoever is the center of the business, which is in In this case, it is the elderly adult.
As the main requirements to mention, we must highlight that the adult must be the owner of the property on which the mortgage will be established. This person may or may not have heirs – in both cases – such a situation does not affect the business that the parties will have in mind.
It is important to highlight that the elderly must be given the opportunity to solely and exclusively receive the benefit of capital guaranteed with the reverse mortgage and that they do not have to face, among others, either the interest or the capital owed, and that they are the heirs who must pay what is owed in the succession.
The older adult has the possibility of choosing to pay a monthly income until his death or a single payment (in both cases), the creditor benefits and protects with the constitution of a mortgage to guarantee compliance with the obligation to pay the rent. capital plus the interest generated, which can be executed only at the time of the death of the domain owner (the person of legal age).
What risks or disadvantages can the reverse mortgage have for applicants and their heirs?
When we think about this type of business, from our perspective, we should not focus on the heirs, since ultimately, they are only heirs at the time of death, and as the technical definition indicates, they are creditors of the assets that leaves the deceased person.
It often happens that the heirs do not have sufficient resources to be able to provide their parents with an adequate quality of life until their death, which is why, when the division of the assets that make up the inheritance is carried out, these are
the first to want to obtain the fruits of it, which is why, through the reverse mortgage, what is proposed is to focus on improving the quality of life of older adults and not on the right to property. of an heir, since ultimately, it is the latter who will have to pay the debt when the assets of the estate are divided.
What experiences or success stories are there in other countries where reverse mortgages have been implemented?
Spain, for example, is one of the countries where it has been demonstrated that this contract has its fruits. In said country, the legal business of the reverse mortgage has allowed the quality of life of thousands of older adults to improve, so that they do not have to depend on their children and/or other people involved to maintain themselves in their daily lives. and his last years of life.
by CEDOC
