The Association of Financial Users (@asufin_) has organized a webinar dedicated to monetization from home ownership, reaching the age of anniversary, where experts such as Pedro Serrano, from the Carlos III University, and Juan Ángel Lafuente, from the Jaime I University, revealed that of the 9 million people who will retire shortly (or have already done so), and that they are known as the generation babyboom, the 80% own a home: “It is a generation that ignored any other type of asset and the savings in its life cycle have materialized in the home they own,” they said.
<cs-ads type="dfp" class="banner" id="Mobile_1" data-condition="
According to experts in Spain there is very little competition in this market for financial products and for that reason, the prices what fix the intermediaries financial are high. The interest rates on reverse mortgages are around 5 and 6% in our country, while in countries like the United Kingdom they are at 2 and 2.5%. In addition, it is a market that is still concentrated in the big cities, Madrid and Barcelona, and to a lesser extent, Bilbao and Valencia.
LICUATIONS: All options to complement retirement.
Reverse mortgage interest rates are around 6%, compared to 2.5% in countries such as the United Kingdom, which are more widely established.
???? https://t.co/TDJAB4oueH– Asufin (@asufin_) May 13, 2021
There are some financial formulas in order to monetize housing in property, and from there obtain income that supplement retirement, in addition to the traditional way of selling the house. As for example, those that involve transfer of property such as bare ownership, reverse housing or real estate income, and a second group that allow maintaining the property (and therefore its transfer to the heirs) and receiving income at the same time.
<cs-ads type="dfp" class="banner" id="Mobile_2" data-condition="
The market will “explode”
Experts predict that the latent market will explode “As with long-lived societies, the longer we live, financial problems tend to be more complex,” Lafuente revealed.
“The impact of having made an erroneous or correct decision manifests itself in the long term and the planning of vital savings is one of the things in which we make the most mistakes,” he added. To which is added “the high degree of tension what supports the sustainability from our pension system”.
The president of ASUFIN, Patricia Suarez it is essential the intervention of an independent advisor in the choice of any of these products, since the correct valuation of the home. In addition, “it has to be explained very well, because it is about complicated products and not all of them are adjusted to the needs of each one”.
<cs-ads type="dfp" class="banner" id="Mobile_3" data-condition="
Suárez has also recalled that from the association they are betting on the financial education of consumers, in addition to responding to the daily queries that many of the users are making in relation to these products.
The experts speak
Lafuente points out that anyone who wants to do this type of operation has to to ask if you want to live in your usual home for the rest of your life, how do you want to receive the income extra that you want to generate, whether in the form of periodic income or all the income at once or if you want to keep the house as your property.
<cs-ads type="dfp" class="banner" id="Mobile_4" data-condition="
For his part, Serrano explained the characteristics of these products, some great unknown in our country, such as the real estate rent, extended in France under the name of Viagers inmobilier, which consists of a contract between two parties, for which a I know of them remains with the property in exchange of but to other part one annuity until his death.
The products best known are the reverse mortgage which involves the transfer of full ownership of the home while simultaneously signing a life rental contract, and the bare property, that what is transferred is property, but not the use and enjoyment of the home. The interested party sells his home but can make full use of it until his death, to the point of being able to rent it.
But there are other products that allow the retention of the property and the subsequent transfer to the heirs, such as the reverse housing or rental swap. The first case is a loan against the value of the house, in which it acts as collateral. The interested party receives the financing and does not have to return it until his death. That is, the heirs will have to do it.
–
In the case of the swap, the experts clarified that it is a genuinely product of our country, given that it occurs in other countries, and is only carried out by a financial intermediary. Draw up an agreement by which you pay the interested party for a certain service, such as a residence in exchange for the rent that the home itself takes away. If this residence, for example, involves the payment of 1,000 euros, and the rent generates 800 euros of profit, the intermediary pays the rest.
Upon death, heirs can repay the debt and recover the property, continue to assign the exploitation of the rental or sell the house and liquidate
Debt.
Regarding the desire of many owners to retain ownership of the house, the experts gave the data that around the 90% of homes that occur in inheritance its over liquidating for the children with a subsequent sale and distribution. Up to 83% of about one hundred participants in the meeting admitted that they will have to supplement their pension, when the time comes, up to 73% would not want to leave their current home. Also, 69% would like to keep the property for their children to inherit.
Regarding the taxation of these products, those that have category of loans are not taxed and those with transfer status enjoy a series of exemptions.
–
