Older people who are in retirement or disability pensions generally do not complain about excess cash. They just always miss it. That’s why they often look for different ways to make their “home budget” a little bit better. One way to make an extra cash injection would be to reverse your mortgage. On October 23, 2014, the Sejm adopted an act on an inverted mortgage loan, according to which the borrower, for the money he receives from the bank, transfers the rights from his property to the bank, which pays him money. So in simpler terms, the bank pays the property owner money until his death and then takes over his property. It would seem that this is a perfect solution for all older people, but not only people, especially if they have nobody to whom they could save their property. However, it turns out that no bank has this product in its offer. Why? There are several reasons. First of all, it is not known how long the person who will use the reverse mortgage loan will live. Secondly, it is not known what value the flat will have after the death of the recipient. Thirdly, in the end, banks do not want to bear quite costly costs associated with monitoring the whole situation. We must also add here that after the death of a person using this product, it is not at all said that the bank will take over the property. Because according to the rules, the family of a person who gets money from the bank has 12 months to repay the debt to the bank and then the bank can not take over.
Does the lack of a reverse mortgage in banks mean that we can not take advantage of additional funds in exchange for real estate? It turns out that it is not. For we can get a pension from mortgage funds. However, such a pension for an apartment is not a product that we wrote earlier, and this product is not subject to banking law. Mortgage funds operate on the basis of the provisions of the Civil Code. The difference between the theoretical offer of banks and the said funds is that when we sign a contract with them, we immediately cease to be property owners. But of course, we can live in it for a lifetime. The amount of the benefit that the fund pays is primarily dependent on the value of the property.
Certainly many people wanted to get additional income, in exchange for waiving the right to your property. And you can think that this market will slowly develop, because we have more and more retirees in our country who need extra cash.