reverse mortgage

A mortgage for adults is a loan for any purpose, which is given in exchange for a pledge of real estate owned by the borrower and is intended for people aged 55 or 60 and older.

Of course there are also conditions, which are detailed below. In short, it can be said that a mortgage for adults can be obtained by those who have real estate free of mortgage, whose value is above a certain minimum amount (each insurance company has its own amount) and that the amount of the loan depends on the age of the borrowers and the value of the property.

The repayment date is flexible and the borrowers can repay the mortgage whenever they want or have their heirs repay it up to 12 months after the borrowers' death.

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From what age can you get a mortgage for adults?

The minimum age to receive a mortgage for adults depends on the body that offers it, and its policy. In principle, these are means of financing for people approaching the age of three, therefore today the lowest age for obtaining a mortgage for adults is 55. Please note that if the borrowers are spouses, the younger age of the borrower is taken into account, both in checking eligibility for a mortgage and in determining the amount of the loan.

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A mortgage for adults is used for any purpose:

A mortgage for adults is used for any purpose the borrower wants, without restrictions. You can even buy an apartment or other real estate with it.

The lender will want to know the purpose of the loan, to make sure it is legal and legitimate, but beyond that there is no prohibition or restriction.

 

Common examples of using a common mortgage:

For a profit-bearing investment - the capital market, real estate purchase or any other savings or investment.

Medical treatments

Beyond sheltered housing

Maintaining a standard of living

payment of debts

Financial help for children in purchasing an apartment or as an early inheritance

Of course, the money can also be used for any other purpose - from buying a car to traveling around the world. You decide.

 

Mortgage repayment routes in a mortgage for adults:

Each company offers several repayment routes, check which routes you can get in each company, and whether it is possible to switch between them according to the wishes of the borrowers.

Common return routes:

Monthly repayment of the principal and interest according to the Spitzer schedule: like a normal mortgage. The repayment will be divided into the interest tracks you chose (for example 60% prime interest and 40% linked interest, or any other mortgage mix you chose).

Interest only repayment: also called grace route or partial balloon. In this route, the monthly payments return only the interest on the mortgage. At the maturity date of the mortgage, the borrowers or their heirs will return the full principal and the remainder of the accumulated interest until the maturity date. This track exists for almost all companies that give mortgage loans to adults.

No refunds: also called a balloon route. The loan, including the accrued interest, will be repaid at maturity, probably by the heirs. This option is magical for many borrowers who do not want to pay every month and prefer that the loan be repaid from the apartment after their death. This desire is completely understandable, but it is important to dwell on the consequences: this is the most expensive loan of all that will eat deeply into the inheritance you will leave to your children. A balloon loan, true to its name and the expenses on it grow and swell. The fund will accumulate compound interest over the years, including the high linkage costs during inflation, as well as interest costs.

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Mortgage costs for adults:

A mortgage for adults obliges you with costs similar to the costs of a normal mortgage, among them:

Cost of permits from the tabu (or the property's registration place).

Payment to the appraiser

Notary fee for signature verifications

Payment to a lawyer accompanying the process

Building insurance cost for the mortgaged apartment (life insurance is not necessary)

Case opening fees - around a few thousand shekels.

Various fees that the different companies require such as credit allocation fees or on documents.

 

 

How is a mortgage for adults different from a regular mortgage?

Let's start with what is similar: both are loans given by a financial body against a lien on a property, which means that if the person who took the loan fails to repay the money, the person who borrowed it can sell the apartment or house to get their money back (in the case of a mortgage for adults, only after the borrowers deceased).

Another similarity is in the process of getting the mortgage - approvals are required from the same bodies as the Taboo, an appraiser and the accompaniment of a lawyer is required.

This is where the similarities end, and the differences between the different types of mortgages begin, and one of the main ones is that the banks do not tend to approve a regular mortgage or a mortgage for any purpose for people who do not have a fixed income such as people who have retired, while a reverse mortgage is a product tailored for them.

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Advantages of a mortgage for adults:

A flexible loan that is not limited in time.

Possibility of early payment without exit fines.

No monthly repayments are required.

Life insurance is not required for a mortgage.

No need for evenings.

Advancement of inheritance to children.

No need to prove repayment ability.

Non-recourse loan - the lender can only be repaid from the pledged asset and not from other assets of the borrower.

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The process of getting a mortgage for adults:

The process is quite similar to getting a regular mortgage.

An introductory conversation and coordination of expectations with the potential borrower

Submitting an application for mortgage approval, along with all the required documents and approvals

You will usually have a meeting or conversation to clarify what else is required

Valuation by an appraiser

Granting approval in principle (sometimes before the appraiser's visit)

Filling out the mortgage documents accompanied by a lawyer

Transfer of funds to borrowers.

The process takes several weeks, it can take about 4 weeks but may be longer if there are long waiting times for approval such as the taboo document, doctor's approval of legal capacity, etc.

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Summary:

A mortgage for adults is the most convenient and easiest solution for increasing the family capital of seniors, if they own real estate. Without commitment to fixed repayments, or to a repayment date, without an invasive income check on behalf of the lending body, and with relatively few associated costs. The interest rates may also turn out to be relatively low, since the mortgage reduces the risk that the debt will not be paid. This is an effective way to turn the apartment you live in into a source of income, without having to change any aspect of your life and without having to sell the apartment or move out of it.