The principle is simple: they pay a certain amount to the owner and, if necessary, send a smaller amount each month, with the house going to the company that provided the money after the owner’s death.
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These companies target their offers mainly to seniors.
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People who do not have heirs, or those whose family ties have been broken or not formed in the past at all, and the senior owner does not care so much that direct descendants inherit a house in debt due to annuity, can hear about it.
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The amount is lower
People who find the offer attractive think that they can live in the house, continue to be registered in the cadastre, do not take the house to the grave anyway and thus can get a larger amount of money and enjoy it.
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However, it should also be borne in mind that the “rent” provider always pays a significantly smaller amount than the market price of the house, and that he actually speculates that the owner will not use the house for a long time.
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Reverse “mortgages” are provided exclusively by non-banks.
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“A reverse mortgage is basically a consumer loan secured by a lien on real estate. The loan is paid to the borrower either once at the beginning or in the form of an annuity for a certain pre-agreed period, the maturity of the loan is linked to the death of the borrower, “confirmed the lawyer Jan Kindl.
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The fact that the borrower is not obliged to repay the loan during his lifetime does not mean that interest does not accrue on it. The loan is usually repayable by the death of the debtor, and if his potential heir does not refuse the inheritance as a whole to the notary, he will have to repay the principal and interest.
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“Before concluding the contract, I recommend consulting the contract and the business conditions so that people do not fall into the trap of various unfavorable ancillary arrangements,” Kindl added.
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“It is an attractive opportunity for some seniors, but in a way a dangerous opportunity to increase their standard of living,” says real estate agent Jan Kaňkovský from RE / MAX G8.
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It is also possible to sell a family house in which the senior lives alone and, for example, no one in the family can maintain it for a standard market price, either directly with the help of a lawyer or through a real estate agency, and buy a barrier-free apartment or housing unit in one of home with permanent care service.
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