Reverse Mortgage

Most common questions from customers about the reverse mortgage

• How much money can I receive for a Reverse Mortgage?

• The money you will receive will depend mainly on your age and the value of your home: the higher both figures, the more you can receive.

• Can I apply for a Reverse Mortgage on a second home or premises?

• No, you can only apply if it is your habitual residence.

• Will I still own my home?

• With a Reverse Mortgage, your home is only used as security, but at no stage do you lose ownership. The costs for maintaining your property will be your responsibility without any change of ownership, just like with any other mortgage loan.

• How is the income received from a Reverse Mortgage taxed?

• The amounts obtained through a Reverse Mortgage (up to life expectancy) are not subject to personal income tax as they originate from a loan or credit. 

• Will the monthly income that I will receive be updated as a result of the CPI?

• No. The monthly amounts received through Reverse Mortgage will remain the same until the end of the mortgage. Otherwise, the CPI would have a direct impact on the final debt that the heirs would have to pay upon death of the owners, and could cause the debt to increase significantly.

• Could the debt incurred with a reverse mortgage end up exceeding the value of the property?

• It is very rare and highly unlikely that this situation will arise, since the product is designed with enough of a margin for your heirs to comfortably pay off the debt. Even if this does happen, the debt will always be limited to the assets of the estate itself, the recovery of the debt is limited to the assets comprising the inheritance itself.

• Who can give me independent advice?

• We have a series of approved companies to carry out the independent advisory service. You can choose the one that best suits your needs from among these companies. If you want to use a third party, you can put them in contact with us so they can be approved.

• Can I repay the mortgage early?

• Yes, it can be repaid early at any time. If this happens, a fee of 0.5% will be charged if the repayment occurs within the first five years in the life of the loan, or of 0.25% if the repayment occurs within or after the sixth year in the life of the loan. The fee is only applied to the amount repaid.

• After signing, do I have to provide any other documents?

• Documents will be reviewed annually with the borrowers and we will request the following documents: 

• Certificate of life: life certificate checked at least once per year: this document declares that a person is alive and states their marital status as at the date of issue. This document can be obtained from the applicable local registry office.
• Home insurance: proof of payment of fire insurance, insurance for other property damage or home insurance.
• Proof that the borrowers are up-to-date with payments with regard to housing expenses: payment of local property tax and payment of communal costs, in that case.

• What happens if they can't sell the house?

• Upon expiry of the fixed term following the death of the holders without the debt having been repaid, will start being collected. Where appropriate, the corresponding foreclosure procedure on the home will be initiated.

• What is the extent of my heirs' liability for the debt?

• The claim will always be limited to the assets of the estate itself.

• Can my heirs keep the house?

• Yes, to do this they would have to pay off the Reverse Mortgage debt by taking out a normal mortgage with any entity or by paying off the debt with their own funds.