Month: July 2017

Reverse Mortgage

Faced with uncertainty about the future of pensions is interesting to learn about alternative products such as annuity and the reverse mortgages, which allow older people to obtain a significant monthly income. The population older than 65 years is steadily increasing in our country. It is estimated that for 2040, pensioners join more than 15 million, almost double that now. According to projections by the Ministry of labour, in the year 2023 public system not can afford pensions spending. In addition, many of the current pensioners belong to the generation of the war and its aftermath, so their benefits are lower than that charged the new beneficiaries. In statements to El Pais, Ignacio Zubiri, Professor of finance at the University of the Basque country, asserts that the rebate would have to suffer the pension to adapt to the new situation should reach up to 40%.

Taking into account this situation what options do the elderly? One of them is monetize your greatest savings: their homes. Currently, its real estate constitutes over 85% of the total savings of the elderly of 65 years. Therefore products such as the annuity and the reverse mortgage on real estate of older people gain a great protagonism. Thanks to them, an older person can obtain a monthly income while still living at home always. These products allow seniors to live their last years in the best conditions, enjoying the savings that with so much effort, sacrifice and work have reaped throughout his life. For many, these products are entirely unknown, as well as who can advise them and how you should manage. We despejemos doubts. An annuity constituted about a property is a contract whereby the seller perceives a monthly pension for the rest of his life, in exchange for the transfer of ownership of your home while maintaining the right of use and enjoyment of the same.

For its part, the reverse mortgage is a loan with a mortgage guarantee granted by a financial institution or Insurance company, by which the elderly of 65 years owners of housing, may perform periodic provisions or a single provision, up to a maximum amount determined by a percentage of the value of current appraisal of the floor, without debt may be required until the death of the owner or of the last beneficiary. The main difference between the two products is that annuity with monthly incomes are much higher and let pay the IBI and the extraordinary Community levies, although conveys ownership of housing. However, with the reverse mortgage the contractor retains ownership of the same. Currently, there are companies that specialize in these products that act as independent advisors and offer personalised studies to older persons without any cost or commitment, trying to provide them the best choice for their specific situations. Carlos a. Martinez Cerezo, President CEO of group removal (company pioneer and leader in the marketing and) (management of these products, and has more than 15 years of experience), claims that these products are having a great success among older people, and that future developments will be very favorable, due to low pensions that are perceived in Spain as well as the growing need for economic resources that has this group, according to the latest study by these professionals.