Live is more expensive. Without palliative. The Bank of Spain warns that in the coming decades, the new pensioners will have less income and more expenses. Will need to supplement their public pensions. In 25 or 30 years, “will be charged a retirement that, on average, will be 50% of your salary, compared to 80% today. They have to find ways to fund your old age,” warns Iñaki Ortega, director of the Deusto Business School.
61% of baby boomers would be willing to use your home as a source of income in retirement if necessary. Because, 55% of those born between 1957 and 1977 do not believe that their income will enable them to live without bounds during his old age, according to the latest study by the Institute of Pension of the BBVA.
Given the high proportion of persons 65 years and older that own a home and the low share of private pension plans, the Bank of Spain defends the reverse mortgage as a option to obtain extra money. It is a type of mortgage loan aimed at older 65 years. Do not lose ownership of the house and receive the money all at once or through monthly payments for life.
The bank could be assessing to return to market this product that failed during the crisis for several reasons. According to the Foundation for Financial Studies, was difficult of explanation; the real estate crisis and the collapse of housing prices it became less attractive; there is a cultural factor that makes people not want to leave the legacy of a home with loads; initial expenses and insurance increased the cost of the operation; the banks had no fear of claims and the possible reputational harm.
To this day, none of the big Spanish banks offering reverse mortgages in a standard way, nor is advertising, which does not mean that they are not willing to grant them depending on the profile of the customer.
For the moment, the insurers are going to with advantage. Caser Insurance already offers the reverse mortgage in Spain, in addition to that marketed by specialized companies as a Group Retreat. “Over 65 years of age receive a monthly income and not lose the ownership of the residence. Has a regulation that protects the user with measures such as compulsory counseling independent and favors him with important tax exemptions”, pointing in Caser.
“The monthly amount that you receive is usually small, because they appraise the value of housing to the poor (as much as 70% of its value in the market),” says Eduardo Molet, consultant real estate Network of real Estate Experts. The formula that more is growing, says by his experience, is the sale of the bare property.
If you opt for a life annuity real estate, the elderly sell their homes but reserve the usufruct until his death. Maintain the right of use and enjoyment of your home during the rest of their lives. “The fiscal terms are very beneficial, as the transmission of the bare property of the normal housing is exempt from taxation in the personal income TAX”, states Sergio Seisdedos, director-general of Vittalias, which offers annuities real estate serving as intermediaries between the small savers who want to buy homes at lower prices and older people, who sell them to exchange for a income and to continue living in them for life.
on the other hand, the annuity as a savings system for retirement every time arouses more interest. Are already 29.232 people 65 years and older which have become a heritage element (such as a home, a background, actions…) in a source of income guaranteed, according to Unespa, based on data from ICEA. Assumes a year on year growth of at 22.81%. In total, these annuities accumulate a volume of savings under management of 2.579 million euros.
