What is a life annuity sale ?

Selling a property on mortgage means to sell a property - appartment, house... - against a mortgage rent, while, possibly, keeping the right to continue to live in the house.

Mortgage

The buyer transfers a sum of money when the deed has been signed. This sum is called the down payment and usually corresponds to about 5 to 10% of the total amount. Afterwards, the buyer regularly transfers a sum - the rent - to the seller until the latter dies.The mortgage can be fixed on two people - two heads. In the case of a reverse mortgage, the amount of the rent is transferred onto the other head in case one of them should die.

Glossary

Down payment

Sum of money transferred by the buyer with the signing of the deed. It is a part of the total value of the property, generally fixed at 5 or 10% of the total sum.

Number of heads

The mortgage can be taken by one or two people. In this last case, the seller will cease to pay a rent should both people die.

Rent (arrear of interest)

Amount of money periodically paid to the seller throughout the duration of his life. A maximum duration can be agreed upon by both parties.
This rent may be indexed in function of the consumption prices or according to the index of living cost.

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