How does the reverse mortgage work in colombia?

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Since mid-2020, people began to talk about reverse mortgages in the country; government, the media, different economic sectors and the population in general began to debate this alternative, which for many is synonymous with opportunity for the elderly and which others recommend analyzing with caution. In 2022, the first product enabled to provide this service was announced. Although since then it has been common to use the term reverse mortgage , and that is how the mechanism was presented, in the case of Colombia it is more precise to speak of Real Estate Life Annuity.

Although they are two similar concepts, the latter refers to Iran Telegram Number Data insurance, the first to credit , and that is precisely why it was implemented in Colombia. This instrument allows the homeowner to negotiate with an entity to buy their property and pay it through a monthly payment for life or in installments, depending on the chosen modality. The client will continue to live in said property for as long as he or she lives and the entity will only be able to take the house when he or she dies. For example, 70-year-old Juan owns a home worth approximately $300 million. He heard about the reverse mortgage and approached an insurance company to learn more about the subject.



There he reached an agreement under the form of a life annuity. After the appraisal of the home, and taking into account variables such as his life expectancy, the entity informs him that he will receive a monthly income of $1,200,000. Juan will receive this money month after month, without having to move from his house. In this way, he guarantees financial support during his old age. Reverse mortgage modalities In any of the cases named below, the person will live in the property until the last day of their life. The entity will take ownership starting six months from the day of his death. Immediate real estate life annuity: The entity disburses a percentage of the total value of the home to the client month by month, until his death.