Reverse Mortgage

What is a reverse mortgage?

The Reverse Mortgage is a credit with a mortgage guarantee aimed at people over 65 years of age who own a home, through which the Financial Entity pays them a monthly income, with the particularity that the Elderly Person does not have to pay back the amounts received or the interest as with a normal mortgage, but rather the debt generated by this financial product is deferred until the death of the contracting party.

There is also the possibility of being able to get paid an initial provision on signing the deed.

Requirements for taking it out

In general, it is necessary to be over 65 years of age and to be the owner of a home. The reverse mortgage can be taken out by 1 or 2 owners. Some entities also require that the home meets a series of specific conditions regarding its value, location and state of conservation. Consult us without obligation for your particular case.

Calculation: the monthly payment to be received will depend on the age of the Elderly Person contracting it and the value of the home, verified through an official valuation. The older the contracting parties are, the higher the monthly rent to be received.

Legal regulations: at present, the Reverse Mortgage is regulated in the First Additional Provision of Law 41/2007 on the Regulation of the Mortgage Market and Reverse Mortgages and in Ministerial Order EHA/289/2011, of 28 October, on transparency and customer protection in banking services.

How does a reverse mortgage work?

The contracting of this product involves the granting of a fixed interest mortgage loan to 1 or 2 Elderly People that allows the collection of a monthly amount for life. The difference between a Reverse Mortgage and a traditional mortgage is that the holder does not have to pay anything to the Bank during his/her lifetime, and the accumulated debt can only be demanded by the Financial Institution 12 months after the death of the last holder.

How do we know the monthly payment we are going to receive?

It all depends on the Elderly Person who takes out the product, i.e. his/her age; the older he/she is, the higher the monthly income will be. Likewise, an official valuation will be carried out to determine the price of the property.

Therefore, the Reverse Mortgage is the ideal complement to your retirement pension, solving your financial problems and all:

  • With the peace of mind of receiving a monthly income for life, without losing your property, which will be passed on to your heirs in the future; even with the possibility of being able to rent it if you are not living in it.
  • With the guarantee of being able to cancel it whenever you wish.
  • Furthermore, you will not have to pay taxes on the monthly amounts you receive or pay any amount to the bank.
  • With all the advantages (the formation costs are financed with the credit, excellent taxation of this product as you do not have to pay tax on them, etc.) and with full guarantees as it is a product regulated by Law 41/2007; it is formalised with the main financial institutions, which guarantees the best Reverse Mortgage.
  • With the security of obtaining the best Reverse Mortgage with Grupo Retiro, our services as independent advisors (as established by Law), will provide you with the contracting of the product with the Bank that is most convenient for you.

This financial product is formalised in a Deed before a Notary Public and registered in the Land Registry and is regulated in the First Additional Provision of Law 41/2007 on the Regulation of the Mortgage Market and Reverse Mortgages and in Ministerial Order EHA/289/2011, of 28 October, on transparency and customer protection for banking services.


Types of reverse mortgages

Currently, there are two types of Reverse Mortgages, Lifetime and Temporary, which are explained below in a very brief and simple way:

  • Lifetime type: the monthly provision is collected until the death of the contracting party. In some cases, the mortgage loan is complemented with a life annuity insurance that comes into operation if the Elderly Person outlives the term of the loan. In other words, it is guaranteed that the fixed amount will be received for as long as the elderly person lives. In addition, he/she may request an advance of capital or an initial drawdown.
  • Temporary type: the monthly amount is collected only during the term set by the Bank according to the customer’s age. Also in this option, an initial amount may be requested at the signing of the Deed.

Advantages and Guarantees of Taking out a Reverse Mortgage

  • Maintain ownership of your home, which means that your home remains yours and in the future your heirs’.
  • Receive a monthly income for life, without you having to pay anything to the Bank for as long as you live, and all this with the guarantee and backing of the main banking institutions in the country.
  • Request, if you wish, an initial amount to cover any pending expenses or to have some capital for possible unforeseen events in the future or to help a relative, or simply treat yourself (a trip, a special gift for you or your family, etc.). Cancel your mortgage at any time, if you wish to do so, for example, if you decide to sell your home.
  • Rent your home, if for any reason you are not going to use it and you consider it appropriate, adding to the income provided by the Reverse Mortgage, the income obtained from renting, and thus financing your stay in a Nursing Home.
  • Taxation: one of the great advantages of Reverse Mortgages are their tax benefits, as they are exempt from taxation, i.e. you will not have to pay anything on your tax return for the amounts you receive every month through the Reverse Mortgage.

The guarantees of the Reverse Mortgages are maximum, since…

  • Like any other credit, it is formalised in a Deed before a Notary Public and registered in the Land Registry.
  • Your heirs will be able to cancel the debt generated on your death in different ways, enjoying the differential that exists between this debt and the value of the property, bearing in mind that the banks design the product so that this differential is important for the heirs to cancel the loan easily.
  • Achieve the best Reverse Mortgage on the market thanks to the independent advisory services provided by Grupo Retiro, which complies with the requirements set out in Law 41/2007 and Law 2/2009, being registered in the State Register of Financial Intermediation Companies under number 309 – second section, and at the same time, we have a civil liability insurance policy with the Zurich insurance company with policy number 58041336. Likewise, Grupo Retiro operates professionally through Grupo Menorca Corredores de Seguros, S.L. with the code J-447 authorised by the Directorate General of Insurance.

On the other hand, you can rest assured that you will have the professional advice and permanent backing of Grupo Retiro, a pioneering company and leader in Spain since 1996 in the management of Real Estate Annuities on homes for the Elderly. We will also be able to help you with our complementary services for the search of Nursing Homes / Centres for the Elderly, Assistance or Home Care companies, Residential Complexes or Apartments for the Elderly, Income Insurance, etc., and of course, completely free of charge.

Please contact us if you have any doubts on any of the points mentioned above or if you would like to request a FREE AND NON-BINDING STUDY on your specific case.

If you prefer to sell the bare ownership of your property in exchange for the payment of monthly rent, please consult our product Real Estate Life Annuity.

We provide you with two documents that will be of interest to you when it comes to finding out about Reverse Mortgages:

  • Download all the information corresponding to this product in the following link: Information on Reverse Mortgages.
  • Finally, we also offer an information brochure on the conditions of the independent financial intermediation service for Reverse Mortgages of the Grupo Retiro in compliance with Law 2/2009.


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