Higher pension for apartment ownership (reverse mortgage)

There is a new way for seniors in Poland to get an additional income for living. The reverse mortgage is otherwise the reverse mortgage credit. The owner of a real property waives the right to their property as from the moment of death (by establishing the mortgage on the real property for the bank or other financial institution) and in return the bank undertakes to pay, on a monthly basis (or as a lump sum), loan installments (payments). It is a bit like a bank would buy from us for credit a real property and pay us a monthly installments in reverse.

But not every senior may gets this credit. The bank will verify the applicant's credit worthiness first, in case of positive decision, the client must incur additional real property insurance expense. The agreement conclusions is possible only if the house or apartment is not encumbered with another mortgage, unless for payment of credit for acquisition, construction, development or renovation of real property. In this case, the debtor (person who took the credit) will have to use part of the money obtained to pay existing debt.

Entitled to conclude such an agreement will be individuals aged 60 or over who own the property or its fractional part. With this form of lending will also be able to benefit seniors having the right to perpetual usufruct of land built-up with a building or buildings, provided they are also the owners of these buildings, as well as seniors holding a cooperative ownership right to property.

A person concluding the reverse mortgage agreement will retain the ownership right to a house or an apartment and the right to live in it until his death, and the bank will sell the property not until the death of the senior (or spouses if they both entered into a agreement), whereas the heirs will be able to repay the debt to the bank and to recover the property within six months from the date of the inheritance division.

Such a solution, quite popular in other countries, allows older people who have low pensions, and have owned property in which they reside, to gain an additional source of income. Rather than sell the apartment and move to smaller, to reduce costs, the elderly have an easy way to raise additional funds for the dignified life.