Do you rent or Annuity Reverse Mortgage?

In turn, the Reverse Mortgage can be defined as a home equity issued by a financial institution or insurance company, which people over 65 years homeowners may perform periodic provisions to a maximum amount based on your age, home value and interest rate conditions applied by each entity.

In other words, as the name suggests it is a reverse mortgage. In a normal mortgage, a bank gives us a loan to pay off our home and we'll go with a particular interest in returning. In the reverse mortgage the bank is giving us money with the guarantee of the value of our home. Although the debt owed to the bank comes to an end this may not be required until the death of the owner, and at all times, the heirs may pay and recover the property. Now, we must take into account that the debt will also include operating expenses and interest of the bank.

The main difference between the annuity is, firstly, that the mortgage does not change the ownership of housing, ie that the property is sold. But of course this affects the monthly amounts received are lower than with the annuity, which provides income which may be up to 40% higher than in the Reverse Mortgage. Furthermore, with the Annuity will not have to pay in future Community or extraordinary spill receipt of Property Tax, and the buyer is obliged to hire a Multi-Risk Insurance on the Continent of housing.

As you can see is not so easy to decide which of these two products of liquefaction of the housing is more appropriate. Actually, it depends on the situation of each person. However, since we want to transmit Retirement Group our experience and knowledge to be as prepared in this regard. Therefore, we will continue to differentiate each product.

With Annuity can enjoy an excellent tax treatment as those over 70 years will be required to declare only 8% of total income received annually. Moreover, the operation is established with all the legal guarantees: Notary Deed in which a resolutive condition for non-payment of rent and registration in the Land Registry. The condition subsequent is a security if the investor fails to pay monthly rents. Another advantage of annuities is to formalize the transaction does not involve any additional cost as all expenses and taxes generated are the responsibility of the purchaser.

For its part, reverse mortgage always maintains ownership of housing, with the possibility of renting. It also has significant tax advantages, since, at first, the monthly credit provisions are not subject to Income Tax of Individuals. Nor must pay any initial cost for setting up the mortgage (these costs are included in the debt), and may at all times until the transaction is formalized before a Notary of independent advice that will ensure proper contract for the product as Law 41/2007 requires reverse mortgage.

Whatever is decided by which will be beneficial to you. Both the Annuity reverse mortgage as you get money that you can enjoy in life and which may cover needs until now not been able, without ever losing the use and enjoyment of your home, that is, while still living in his house all his life.