It is a sort of “reverse and facilitated” mortgage: in fact, with the mortgage annuity, who already owns a property can borrow from the bank an amount of money equivalent to the value of a part of his home. The sum received will be guaranteed by a mortgage that is turned on on the property.
In this way, the applicant can obtain a considerable sum of money, for which he will not have to pay any installment, managing to maintain the ownership of the house, without compromising its transfer to the heirs.
The amount that can be requested, specifically, varies according to the value of the property (assessed by an expert) and the age of the applicant : the higher the age, the greater the amount that can be obtained. Older people can request up to 50% of the property value.
Requirements to access the loan:
- The applicant must be a natural person and must be over 60 years of age (companies and legal entities are excluded)
- Must own a residential property (shops, offices, commercial properties, industrial buildings, etc. are not included)
- The property must not already be mortgaged
The financed subject has the possibility to pay off the debt at any time and obviously to cancel the mortgage on the house.
The legislation also allows the parties involved to agree on any repayment method: the beneficiary can in fact decide to pay only the interest accrued annually or agree with the lender a gradual repayment plan that includes both the interest and the sum loaned.
Instead, a mandatory full refund is provided, in a single solution, where the following events occur:
- death of the recipient of the lifetime loan
- transfer, in whole or in part, of the property or of other real or enjoyment rights on the property given as collateral (eg usufruct)
- performing acts that can significantly reduce the value of the asset
If within 12 months from the occurrence of one of these three situations the loan is not fully repaid, the credit institution that granted the loan is entitled to sell the property at market value, being able to gradually reduce the price by 15% each year, until the moment of definitive sale.
The heirs can “redeem” the property.
As long as the borrower remains alive, he can safely live in his “mortgaged home”. The latter, in fact, does not become the property of the bank but is always burdened by a debt. It follows therefore that the house, upon the death of the financed subject, if the same has not provided for the early repayment of the loan, will enter in succession, but the debt will not be extinguished.
In this circumstance, the heirs are granted a double possibility:
- pay off the debt within 12 months, returning to full ownership of the property, canceling the mortgage.
- leave the property to the bank that will proceed with the sale, according to fair market prices in order to cover the debt (any difference between the sale of the property and the debt coverage will be paid to the heirs).
Advantages of the Lifetime Mortgage Loan
The lifetime mortgage loan is an interesting solution for anyone over 60 who is in financial difficulty, especially considering the widespread problems of access to credit for the category of retirees or in any case of the over 60s, who precisely because of their age usually more difficult to obtain financing with less guarantees.
To date, the solution most used to obtain liquidity consisted of the sale of one’s home at a reduced price, maintaining its bare ownership. This hypothesis, however, goes to the detriment of any heirs, who find themselves deprived of real estate when the subject dies. Thanks to the mortgage loan, however, they maintain the possibility of “redeeming” the house or otherwise they can still choose to sell the house, in order to pocket any difference after having paid the credit to the bank.
Another significant aspect to consider is that the life-long mortgage loan could represent the only financing possibility for all those over sixty who have suffered protests and / or negative reports in Crif and in the other databases. Even the so-called “bad payers” and the protested would therefore have the possibility, through the mortgage annuity, to access credit and obtain considerable liquidity that could be used to proceed with debt recovery, aimed at defining all the outstanding debt positions. with banks and financial institutions. You can get the loan by looking for a bank in your area that delivers the product.