To obtain a lifetime mortgage loan from participating banks, it is necessary to comply with the property’s age and value requirements established by the new legislation on the subject. The life annuity mortgage, or life annuity loan, is not in fact a novelty in the Italian credit sector: however, recently some new rules have changed some elements, firstly extending the age requirements which establish that it can apply for it. In fact, before this funding could only be requested by the over-65s, today it is available for all those over 60 and who respect the other conditions.
The operation of the life-long mortgage loan has remained the same: the owner of a property can apply for a loan even in old age, but placing the house as a loan guarantee. This is done by placing a mortgage on the building. Since it is an “annuity” loan, no reimbursement or payment of installments is required for the entire life of the beneficiary. In this period, however, interest is accrued, as in the case of any other loan. However, the new legislation provides for the possibility of customizing the methods of returning the amount, allowing repayment at any time or the payment of interest by installments.
The particular functioning of the life loan could however weigh on the heirs, who could find themselves having to repay the sum received on loan from the beneficiary. In reality, the new rules have just intervened to better protect the heirs: the latter can choose whether to repay the loan taken by the parents and maintain ownership of the property, or, within 12 months of the succession, put the house up for sale, repay the bank and then eventually pocket the difference. In any case, the law establishes that the reimbursement paid by the heirs can never exceed the commercial value of the property at the time of the succession (ie the price at which it will be sold by the heirs, who will not be able to pay it).
Even another requirement for obtaining an annuity mortgage loan should help the heirs not to suffer an unfair mark-up: the loan is granted only in the case of easily marketable properties and significant market value, aspects that will be certified by an expert. Finally, the loan usually allows the disbursement of a sum of between 15% and 50% of the value of the property.