It is not about explaining in depth what is a reverse mortgage, nor its advantages and disadvantages.
Perhaps it would be best to read the article of the Ministry of Labor with the title Reverse Mortgage and similar figures, although regarding the reference to expenses is published before the suppression of the tax of documented legal acts and the reduction of notary fees and register them.
What we should make clear is:
That normally is not a loan, but a credit that is guaranteed with a home, be it first residence or not.
That if it is a credit, its availability is agreed: a little each month and during the maximum term agreed; It can include as a first provision the amount necessary for the expenses of its formalization.
That it is not a life annuity, neither civilly nor fiscally; The owner of the home given as collateral is still the owner of the home, you can cancel the mortgage and request a new one if it increases the value of the same and requires more monthly liquidity, or you can dispose of it, canceling the mortgage, and make the difference between the price of the sale and the debt; fiscally, you are holding a loan, you do not receive a life pension taxed; It does not have the 18% tax, although it will be a second residence, since it has not alienated the house, etc.
Regulations in the reverse mortgage
General rule
All the general rules on loans or mortgage loans will apply to you, but it has its special regulation.
Regulations in particular
Law 41/2007, of December 7, which modifies the Law 2/1981, of March 25, of Regulation of the Mortgage Market and other regulations of the mortgage and financial system is what is also called regulation of the reverse mortgages.
Your statement of reasons indicates its advantages and its concept by saying:
The reverse mortgage regulated in this Law is defined as a mortgage loan or credit from which the owner of the dwelling makes provisions, normally periodic, although the provision may be one-time, up to a maximum amount determined by a percentage of the appraisal value at the time of the constitution. When this percentage is reached, the major or dependent ceases to dispose of the rent and the debt continues to generate interest. The recovery by the entity of the arranged credit plus the interest normally occurs once when the owner dies, by cancellation of the debt by the heirs or the execution of the mortgage guarantee by the credit institution.
And keep saying:
There is no doubt, then, that the development of a reverse mortgage market that allows older people to use part of their real estate to increase their income offers great potential for generating economic and social benefits. The possibility of enjoying the accumulated savings in the home in life would greatly increase the ability to soften the profile of income and consumption throughout the life cycle, with the consequent positive effect on welfare.
The law itself has provided for a regulatory development, but this does not preclude its immediate application; There are certainly Laws that contain delegation or remission receptive to the Executive (as the Law of Bases), but outside these cases the Regulations provided are simple development of the Law, submitted to it and before its enactment the Law already has direct force, as is the case that concerns us. As the DGRN says in resolutions dated January 11, 2011 [j 1] and November 4, 2010: [j 2]
such development rules are not essential for the new product - reverse mortgage library - to be able to deploy its effects, (...) And it is that in the cases of normative referral made by an Act through a re-sending to a later regulatory regulation in favor of the Administration, outside of the cases of legislative delegation or remission recepticia (case of the Basis Laws referred to in Article 82 of the Spanish Constitution), the referring law has direct and own regulatory force, so that the development of the legal remission to the Regulation arises a strictly regulatory rule, and therefore subordinated to the law of referral itself, without that the visndi obligation of this is conditioned to the previous production of the regulatory standard, unless that was expressly provided by that Act or result essential because of its content.
On the other hand, it is necessary to take into account the provisions of Order EHA / 2899/2011, of October 28, on transparency and protection of the customer of banking services, which, as its name indicates, applies to the services provided by credit institutions. (Article 1. Purpose.: The purpose of this ministerial order is to guarantee the adequate level of protection for customers of credit institutions, through the implementation of transparency measures in the loan
