If we are over sixty years of age and need liquidity for extraordinary expenses, health care or to help a child, it may be less easy to access credit. But, if you own a home, there is a way to apply for financing from the bank even if you are past this age group. The solution is the lifetime mortgage loan (PIV).
How does the life mortgage loan work?
The request for a lifetime mortgage loan requires that the bank or financial institution immediately liquidate us an amount equal to about half (but it can reach 60%) of the value of the house we own. The money arrives immediately in the account, in a single tranche, and must not be returned as long as you are alive, but only after your death, with the sale of the house.
To obtain the lifetime mortgage loan, it is necessary that not only those who take out the loan, but also the other people who live in the home that is guaranteed, have passed the age of sixty. The percentage of the value of the house that is recognized as a loan depends on various factors, such as the age of the applicant and a range of maximum and minimum amounts provided by individual lenders.
After the death of the person who took out the loan (in the case of a spouse or a more uxorio partner in the house, upon the death of the longest-lived of these) the bank takes possession of the house. Within 12 months of the contractor’s death, the heirs, if they wish, can pay the balance of the debt (plus interest and expenses) or sell the property. After this period, the bank has the right to sell the property, at the price set by an independent expert, without having to resort to an ordinary judicial executive procedure, reducing the price by 15% every 12 months.
If the final price of the property does not fully cover the amount of the amount lent and the interest accrued, it is good to know that the bank will in no way be able to rely on the heirs. However, the debt is considered paid once the bank has taken possession of the house. On the contrary, but it is a remote hypothesis, if the house is sold at a higher amount than that necessary to cover the debt with the bank, the possible surplus is up to the heirs.
Life-held mortgage loan, what to do attention?
The lifetime mortgage loan is a loan formula that does not pose major concerns (the figure, in a sense, is already paid by the house guarantee) but it is still necessary to pay attention to two circumstances that involves the immediate repayment of the loan to the bank. The first has to do with the sale of the house: if the property given as collateral for the loan is sold, obviously the guarantee no longer exists and therefore the loan must be repaid. The same thing happens if acts of willful misconduct or gross negligence are carried out on the house or even works and renovations that significantly reduce its value.
In this case, the property given as collateral is no longer that shown to the bank and on the basis of the value of which the loan amount had been agreed and, therefore, the contract lapses and the amount must be returned.