Korean Goverment to Back Reverse Mortgages

The South Korean government has decided to provide loan guarantees next year to financial institutions that sell reverse mortgages as part of its efforts to promote the products, the Ministry of Finance and Economy said.

These reverse mortgage loans will allow people to receive a certain amount of money on a regular basis from financial institutions using their homes as collateral, and the ownership of the home is taken over by the lender after the term of this kind of mortgage ends.

According to the ministry, the scheme, introduced in May last year, will help resolve the problems faced by the elderly with low incomes and strengthen the countrys social safety net. Also, the government plans to provide a variety of tax incentives for the products.