The Chamber of Deputies has just approved a bill presented by the Democrats Antonio Misiani and Marco Causi concerning the life-long mortgage loan. This is a modification to the previous legislation which has the specific purpose of making this type of financing more convenient for all those who decide to request it, as well as offering greater guarantees to the same banking institutions called upon to issue it.
Home equity loan
Called a home equity loan in English-speaking countries, the mortgage on mortgages is a type of loan available to that group of customers who are over sixty-five years old and are also homeowners. In order to be paid, it is necessary to register the mortgage on the building in question, which is in favor of the bank or of a financial intermediary.
Naturally the financing depends on the market value of the property, which must be established by a preliminary assessment. Other criteria that affect the amount of the loan are the age of the applicants and their gender. With regards to the procedures for reimbursement, it may be the owners of the house who establish them, maintaining their possession and undertaking not only not to sell or rent them, but also to keep them in good condition.
Extinguish the loan in a single solution
The mechanism devised envisages that once the loan is issued, the relative interest on the sum disbursed begins to accumulate, which will then have to be deducted from the value of the property when the owners have died. Their heirs, at that point, will have the right to decide whether it is the case to sell the house, directly or entrusting the mandate to the institution that granted the financing, to extinguish the loan in a single solution with the amount eventually obtained by the sale, or do so by repaying all the capital plus the interest, thus returning in full possession of the dwelling.
The extinction can also take place more gradually, based on a plan approved at the time of drafting the contract, which in turn can be closed at any time by the subscribers. In this case, the contractors are required to return the starting capital plus the accrued interest. It should also be remembered that for the underwriters of the loan, as indeed for the heirs, it is not possible to ask for figures that go beyond the value of the dwelling.
The amendment to the law law 2003 of 2005 is mainly aimed at ensuring liquidity for elderly people who own a property, so as to enable them to supplement their financial availability for any eventuality. Based on preliminary estimates of the effects of this initiative, the number of interested parties could be around 200 thousand people and the turnover that could be generated by the life-time fiduciary loan could amount to twenty billion euros.