The advantages of the reverse mortgage in a situation where the population is getting older

The Reverse Mortgage – a winning formula for pensioners who want to improve their income without selling their home – is making its way to Spain at a critical pace. According to the General Council of Notaries, in 2023, 409 loan minutes were signed according to reverse mortgages. A record figure that 2024 is already threatening to surpass.

“The reverse mortgage is the financial product that allows you to face retirement with greater financial well-being,” reveals Ricardo Gulias, CEO of RN Your Mortgage Solution.

The expert emphasizes that “the aging of the population and the uncertainty about public pensions favor their expansion,” saying that “it is essential that the client understands and their heirs where this method comes from and what it means, because many believe that “The property of the house is lost and cannot be recovered.”

Get liquidity
Until recently, it was difficult to achieve liquidity without having to sell your home. “It is possible to turn housing into an economic resource for the elderly population thanks to the reverse mortgage,” reveals Ricardo Gulias, CEO of RN Your Mortgage Solution. This formula appears to be the most appropriate solution to that you will not lose ownership of the property and that you will receive additional income. Gulias is sure that “this financial product allows you to face retirement with the greatest financial well-being, getting rid of the house to free until a certain age or until death and receive a monthly income or one payment at a time.

Exponential growth

Reverse mortgages have shown a remarkable trend in recent years. According to the General Council of Notaries, in 2023, 409 loan minutes equivalent to reverse mortgages were signed, the second highest number since there are records, just behind 2022 (549).

The latest data from notaries noted 43 reverse mortgages in the first quarter of 2024. “On these numbers we must also add the registered net property companies, a similar model that allows the right to use a home and to enjoy, but whose property has passed. to private companies,” said Ricardo Gulias.

The CEO of RN Your Mortgage Solution emphasizes that, “the age of the population and the uncertainty about public pensions favor the extension of the reverse mortgage.” However, the expert points out some obstacles -possible obstacle: “Many families still have the burden of having to leave a home as a legacy to their children.” In addition to this cultural factor there are the doubts raised about his work. “It is vital that both the client and their heirs understand where this method comes from and what it means to monetize the property, as many believe that property the property is lost and cannot be recovered,” he affirms.

Conspicuous recruitment

Unlike more traditional options, such as selling or renting, the reverse mortgage does not involve abandoning the property. On the other hand, “although net ownership allows us to continue living in the house thanks to the usufruct being maintained, after death the heirs do not have the option of taking the debt and the building repossession, that is the system. protecting the reverse mortgage,” explained Gulias.

The spokesperson for RN Your Mortgage Solution warns that each case must be thoroughly investigated: “In addition to the location of the home and its features, which are aspects directly related to its value, other key factors include such as the client’s age, marital status and life expectancy. In this sense, Gulias explains that “it is highly recommended to get expert advice to know the profit obtained through this work, to be able to compare to compare alternatives and make an informed decision.”

The evolution of the reverse mortgage is very promising. “We see more and more organizations that are committed to include this product in their offer,” says Gulias, because the positive commercial interest in this equipment is good news for the client: ” More promotion of the reverse mortgage will strengthen competition and lead to a wider, more attractive and more personalized catalog,” concluded the expert.