Owning a home is a valuable asset for the future. According to the latest census carried out by the National Statistics Institute (INE), three out of every four households, 75.5%, owned their home in 2021. Although the percentage has fallen by 3.4 points compared to a decade ago, residential real estate is the basis of many families' wealth.
Until recently, achieving liquidity without having to sell the home was difficult. "Turning housing into an economic resource for the senior population is possible thanks to the reverse mortgage," reveals Ricardo Gulias, CEO of RN Tu Solución Hipotecaria. This formula is emerging as the most suitable solution for not losing ownership of the property and receiving an extra income. Gulias is sure that "this financial product allows you to face retirement with the greatest possible financial wellbeing, freely disposing of your home until a certain age or until death and receiving a monthly income or a one-off payment at the same time".
Reverse mortgages have shown extraordinary growth in recent years. According to the General Council of Notaries, in 2022, 787 operations were reached, a figure that far exceeded the signatures reached in 2021, when 197 were registered, resulting in a year-on-year increase of 299%. The increase between 2022 and 2021, of 77%, was also notable. The most recent data from notaries recorded 177 reverse mortgages in the first quarter of 2023.
The CEO of RN Tu Solución Hipotecaria stresses that, "the ageing population and the uncertainty surrounding public pensions favour the expansion of reverse mortgages". However, the expert points out some possible obstacles: "Many families still carry the burden of having to leave a home as an inheritance to their children". In addition to this cultural factor, there are also doubts about how it works. "It is essential that both the client and their heirs understand what this method of monetising the property consists of and what it entails, as many think that ownership of the property is lost and cannot be recovered," he stresses.
Unlike the more traditional options, such as selling or renting, the reverse mortgage does not entail abandoning the property. On the other hand, "while the bare ownership allows you to continue living in the house thanks to the fact that the usufruct is maintained, after death the heirs do not have the option of assuming the debt and returning to the property, which is the system defended by the reverse mortgage", explains Gulias.
The spokesperson for RN Tu Solución Hipotecaria warns that each case must be studied in detail: "In addition to the situation of the property and its characteristics, which are aspects directly related to its value, other key factors come into play such as the client's age, marital status and life expectancy". In this sense, Gulias explains that "receiving expert advice to find out the profitability that would be obtained through this operation is highly recommended, in order to be able to compare with other alternatives and make an informed decision".
The evolution of reverse mortgages is very promising. "We are seeing more and more entities that are committed to including this product in their offer", comments Gulias, considering that the progressive commercial interest in this mechanism is good news for the client: "Greater promotion of the reverse mortgage intensifies competition and results in a wider, more attractive and personalised catalogue", concludes the expert.