Reverse mortgage, or likewise alternatives

[desde_Holanda]

Probably not realistic, but gonna pop the question anyway:
My estimate is that at least 90+ % of the real estate (casas, PH, apartments) in Buenos Aires is fully mortgage free. Is there any sign of the development of financial instruments to borrow against the value of the (existing) house, e.g. for pensioners? Think of Reverse Mortgage, Credit Mortgage or Equitable Mortgage, or whatever mortgage products in this category that have been developed in other countries.

 

[nikad]

Probably not realistic, but gonna pop the question anyway:
My estimate is that at least 90+ % of the real estate (casas, PH, apartments) in Buenos Aires is fully mortgage free. Is there any sign of the development of financial instruments to borrow against the value of the (existing) house, e.g. for pensioners? Think of Reverse Mortgage, Credit Mortgage or Equitable Mortgage, or whatever mortgage products in this category that have been developed in other countries.

I remember reading about it a few years ago. I recall it is not something banks do atm, It is not yet ruled by law. If you have a trustworthy escribano you could ask. Check this out: https://www.colescba.org.ar/descarga/43JNB/T4/T4_BRAGA FUSTA_La_hipoteca_inversa.pdf. I believe it is still a project, so be very weary of anyone offering it. https://www4.hcdn.gob.ar/dependencias/dsecretaria/Periodo2022/PDF2022/TP2022/1158-D-2022.pdf

 

[desde_Holanda]

I remember reading about it a few years ago. I recall it is not something banks do atm, It is not yet ruled by law. If you have a trustworthy escribano you could ask. Check this out: https://www.colescba.org.ar/descarga/43JNB/T4/T4_BRAGA FUSTA_La_hipoteca_inversa.pdf. I believe it is still a project, so be very weary of anyone offering it. https://www4.hcdn.gob.ar/dependencias/dsecretaria/Periodo2022/PDF2022/TP2022/1158-D-2022.pdf

Thanks Nikad. Always amazed by your knowledge. Didn't know they use the term 'hipoteca inversa', so that's already good to know. Effectively using the value of a home to generate extra income without having to sell is still a major problem, even in the 'first' world. Existing solutions are pricey and generally have very complex conditions.

As I read, the law needs to specify some additional rules, to set a framework for possible suppliers, a framework that is protecting the elderly 'in need'.
I expect that even if this framework is set, banks will be very cautious to offer this most complex type of mortgage. It's complex in its rules, the necessary advice and in its processes in the last phase of the mortgage.

Nevertheless, as mentioned, it's good to know the current status in Argentina. Thanks again.

 

[zensailor]

The banks will be generating those loans in a NY minute as soon as they get the green flag... it is an instrument they can develope that will abuse their borrower , generate a ton of garbage fees, and involve as many outside counselors as is humanly possible ... with all of the risk on the borrowers shoulder ... these loans do not share a good history

 

[desde_Holanda]

The banks will be generating those loans in a NY minute as soon as they get the green flag... it is an instrument they can develope that will abuse their borrower , generate a ton of garbage fees, and involve as many outside counselors as is humanly possible ... with all of the risk on the borrowers shoulder ... these loans do not share a good history

It's a very tricky income solution, I know. But there's always the freedom to judge the offer and say no. Personally, I would be happy to at least have the chance to view any possibilities. I've worked in personal finance myself so I am pretty sure what to look for.

 

[zensailor]

Your comfortable history with these instruments is an advantage ... the marketing will be aimed at a less than knowledgeable population .... as are the abuses ... better and more secure options eliminate reverse mortgages as a real consideration ... it's the older persons version of a negative amortization mortgage ...