A mortgage for adults is a loan for any purpose, given in exchange for a mortgage on a real estate property owned by the borrower and intended for people aged 55 or 60 and over.
Of course, there are also conditions, which are detailed in detail below. In short, we can say that a mortgage for adults can be obtained by anyone who has land property free of mortgages, whose value is above a certain minimum amount (each insurance company has its own amount) and whose loan amount depends on the borrower's age and the value of the property.
The repayment date is flexible and borrowers can repay the mortgage whenever they want or their heirs can repay it up to 12 months after the borrowers' death.
Reverse mortgage
The safest mortgage for you
A mortgage for adults is used for any purpose:
An adult mortgage can be used for any purpose the borrower wants, without restrictions. You can even use it to buy an apartment or other real estate.
The lender will want to know what the purpose of the loan is, to ensure that it is legal and legitimate, but beyond that, there is no prohibition or restriction.
From what age can adults get a mortgage?
The minimum age for receiving a mortgage for adults depends on the body offering it, and its policy. In principle, this is a means of financing for people approaching their third year, so currently the lowest age for receiving a mortgage for adults is 55. Note that if the borrowers are a couple, the age of the younger borrower is taken into account, both in checking eligibility for a mortgage and in determining the amount of the loan.
Moving to assisted living
Medical treatments
For the purpose of a profit-bearing investment - the capital market, purchasing real estate or any other savings or investment
Financial investment for children in the purchase of an apartment or an early inheritance, and for any other purpose. You decide.
Payment of debts
Maintaining a standard of living
Common examples of using a reverse mortgage
Mortgage repayment paths for adults
Each company offers several refund routes, check which routes you can receive from each company,
And is it possible to switch between them according to the wishes of the borrowers?
Common refund routes:
No refunds
Also called a balloon route. The loan, including the interest accrued on it, will be repaid on the maturity date, probably by the heirs. This option appeals to 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 principal will accumulate compound interest over the years, including the high linkage costs during a period of inflation, as well as the costs of interest.
Interest only repayment
Also called the grace or partial balloon route. In this route, the monthly payments repay only the interest on the mortgage. At the time of mortgage repayment, the borrowers or their heirs will repay the full principal and the remaining interest that has accumulated up to the date of repayment. This route is available to almost all companies that provide mortgage loans to adults.
Monthly repayment of principal and interest according to the Spitzer schedule
Like a regular mortgage. The repayment will be divided into the interest rates you have chosen (for example, 60% prime interest and 40% linked interest, or any other mortgage mix you have chosen).
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 institution against a lien on a property, which means that if the person who took the loan fails to repay the money, the person who lent it can sell the apartment or house to get their money back (in the case of a mortgage for adults, only after the borrowers pass away).
Another similarity is in the process of obtaining a mortgage - approvals are required from the same bodies as the Taboo, an appraiser, and the assistance 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 banks do not tend to approve a regular mortgage or an all-purpose mortgage 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.
Advantages of a mortgage for adults
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A flexible loan that is not limited in time.
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Possibility of early repayment without exit penalties.
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There is no monthly repayment obligation.
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No mortgage life insurance is required.
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No need for evenings.
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Advancement of inheritance to children.
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You do not need to prove your ability to repay.
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Non-recourse loan - the lender can only be repaid from the mortgaged property and not from the borrower's other assets.
The process of obtaining a mortgage for adults
The process is quite similar to getting a regular mortgage.
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Introductory conversation and coordination of expectations with the potential borrower
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Submitting an application for mortgage approval, along with all required documents and approvals
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You will usually have a meeting or conversation to clarify what else is required.
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Valuation by an appraiser
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Granting approval in principle (sometimes before the appraiser's visit)
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Filling out mortgage documents with the assistance of a lawyer
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Transferring funds to borrowers.
The process takes several weeks, it can take about 4 weeks, but may be extended if there are long waiting times for approval, such as the taboo wording, a doctor's certificate of legal competence, etc.
In conclusion
A mortgage for adults is the most convenient and easiest solution for increasing family capital for seniors, if they own real estate. Without a commitment to fixed repayments, or a repayment date, without an invasive income check by 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.