Get to know Reverse Mortgage, a home loan for the elderly.

When you were young and wanted to have a house, you had to apply for a loan and repay it to the bank every month to get your dream house. But by the time you retire, you have a dream of selling your house and getting a monthly lump sum of money instead. Is it possible? The answer is yes, you can do it with something called Reverse Mortgage. What will the details be like? Get to know it together with ACU PAY!

What is Reverse Mortgage?

“Reverse Mortgage” to be easy to understand is that when you put your house on a mortgage with a bank, instead of you paying to the bank every month, it’s like a typical home loan.  

Instead, the bank becomes the payer to pay you every month. It’s like the bank is the one which is buying our house instead. When the final payment is due, the house will be to the bank’s, as opposed to a general mortgage which the house will be ours.

This kind of mortgage allows you to still be the owner of the house and can live in it until you die or decide to sell it. After the contract expires, the house will be owned by the bank and sold on auction.

How is reverse mortgage importance to the elderly?

Reverse Mortgage is important for people who have reached retirement age and are people who are moving into this society. The benefits of the loan model can be summarized as follows.

  1. Get a lump sum of money for everyday use and to pay off debts 
  2. Responding to elderly people who do not have pension or Provident fund for old age.
  3. Even if the home is used as collateral, borrowers will still be able to live in the house as before.

Who can apply for the house for Reverse Mortgage?

The following conditions must be met:

  • The applicant is an individual person, Thai nationality, aged 60 years and under 80 years, not incompetent or quasi-incompetent.
  • Home, condo and townhome collateral must be the borrower’s primary residence and must be registered during the loan period.
  • A joint loan can only be filed with a legal spouse or siblings who share the same ownership and are aged 60 years or older (the requirement depends on each financial institution).
  • The maximum loan period is 25 years, or the borrower’s age combined with the loan period must not exceed 85 years.
  • If the borrower is still alive, she/he can file for renewal or redemption of the house. If she/he dies before, the bank will put the collateral on the auction in case the heir does not redeem it.

Which banks can do the reverse mortgage?

Currently, specialized financial institutions have been provided with a pilot test with loan services such as Government Savings Bank, Government Housing Bank, Bank for Agriculture and Agricultural Cooperatives. More details can be found at each bank.

However, Reverse Mortgage is still new to Thailand, but it is another alternative to support the increasing number of elderly people. The Reverse Mortgage application is another type of post-retirement financial plan that will allow us to keep cash flow for the rest of our lives. However, the details should be fully studied before making a decision in order to enjoy the end of life.

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