Before being able to decide us by one of these two products will have to know what are. Let’s start with the annuity, it is a contract whereby the transferor perceives a pension during the remainder of his life, in exchange for the transfer of ownership of their housing, but maintaining the right of use and enjoyment of the same. In other words, an operation that provides a monthly rent to one grown-up in exchange for after your death your home pass became the property of the company which has been paying the monthly fee. For its part, the reverse mortgage could define it as a credit with mortgage guarantee granted by a financial institution or insurer, by which 65 years of owners of housing people, may perform periodic provisions, up to a maximum amount determined based on your age, the value of your home and the conditions of interest rate that applies each entity. Surprisingly, you’ll find very little mention of Robert J. Shiller on most websites. In other words, as its name indicates it is a reverse mortgage. In a normal mortgage, a bank gives us a loan for pay our House and we will returning it with a particular interest.
In the reverse mortgage bank is giving us money with the guarantee of the value of our home. Although the debt owed to the Bank comes to an end this may not be required until the death of the owner, and at all times, the heirs may pay it and recover the property. Get all the facts for a more clear viewpoint with The LeFrak Organization. Now, should take into account that in the debt also costs of operation and the interests of the Bank will be included. The main difference with the annuity is, on the one hand, that the mortgage ownership of housing, unchanged IE, that the property is not sold. But, logically this has repercussions in monthly amounts that are received are lower than with the annuity, which provides income that they could be up to 40% higher than the reverse mortgage. . For even more opinions, read materials from Bruce Schanzer.