Reverse mortgage

A reverse mortgage or reverse mortgage (English: Reverse Mortgage ) is a type of real estate retirement. These financial services was introduced in the U.S. and is now also offered in several European countries, including Germany and Austria.

The term is misleading in that it ( a mortgage ) and the financial services product is no close, objective connection between a mortgage reverse mortgage in its German translation. It is therefore also called real estate pension.

With reverse mortgage is a loan agreement, which is a property as collateral. The loan can be paid in a lump sum or in monthly installments. The homeowner retains ownership and can continue to live in his property. As a security securitized mortgage, interest and repayment is to be deferred. The debt burden built up - in contrast to the normal construction loan - from year to year, therefore, the term reverse mortgage has developed.

The loan repayment is only after the death of the borrower or when moving out of the property - for example, when moving into a nursing home - due. The heirs can get the loan from its own assets, then remove using a new loan or by selling the property. Or the Bank realizes the property and pays a possible surplus from the heirs. The borrowers are protected from eviction as long as one of the partners of the borrowers' side lives, has his main residence in the house and as long as the borrower's local loads ( taxes, etc. ) contributes.

Reverse mortgages to help especially homeowners, in addition to their house no bigger financial assets and possibly only a low income, or an inadequate pension have: One monthly payment of the loan agreement with the variant that the borrower remains in the home, similar to the construct of lifelong living law ( and at the same time a sale against annuity ). With declining pensions and more and more people without children, providers expect from a high potential. In the U.S., the number of users of Reverse Mortgages has increased six-fold between 2001 and 2006 and continues to rise steeply: in 2006 alone, around 30,000 to 70,000 government- backed in that account for 90 percent.

The problem for the homeowner is that only high-value, debt-free property achieve a significant retirement in a good location. Who owns an unattractive, verwohntes object on the land or still paying off a mortgage, will hardly benefit. Be added to this are also the significant costs of financial services. The homeowner can always expect only a much lower payment than would mathematically result in the market value and the purely statistical life expectancy.

Since the conclusion of such property pension practically the home's value is delivered to abzuwohnen him, the legacy may be considerably diminished or even eliminated after the death of the borrower.