Home Pension Mortgage Creation Type now can be switch to Trust Type

- Subscribers can switch the security establishment type any time they want

- A switch to a trust type does not affect the monthly payment amount

Korea Housing Finance Corporation(HF, CEO Choi Joon Woo) announced July 11 that Korean Home Pension subscribers now can switch their security establishment type from mortgage creation to trust-type and vice versa, anytime they want. 

Korean Home Pension is a HF-guarantee-backed financial product, which allows the elderly homeowners to take out loans with their homes as collateral and receive monthly payment for the lifetime.

So far, customers had to choose a collateral establishment type between the mortgage creation or trust-based one at the time of subscription, which once set, alteration had not been allowed.

However, with the policy improvement of this time, subscribers who opted the mortgage establishment type now can change it to the trust type any time they want, and vice versa. 

* To be noted, however, a transition to trust-type is limited on the following cases; ？the collateral house falls into the category of multi-use housings(with housings for commercial purposes) or houses of farmers or fishermen in accordance with the Agricultural Land Act, of which ownership cannot be transferred, ？when confirmed through documents that there are overdue concerned taxes, or that they are illegal buildings, or ？when the monthly payment of the existing home pension has been suspended.

Furthermore, even during the transition period, all of the previous pension benefits are maintained and there is no change in the monthly payment amount. 

The ‘trust-type home pension’, which HF launched in June, last year, ensures an automatic succession of home pension to spouses at the time of subscribers’ deaths without a consent of legal heirs such as children, and allows the collateral house to be rented with a deposit. With these advantages, it has cemented a position as a useful tool for seniors to prepare stable livelihood in the advanced years. 

Home pension subscribers can call HF Call-Center(1688-8114) or visit HF website (www.hf.go.kr) for preliminary counselling regards to the type change. After the counselling, they can proceed to make alteration by visiting nearby HF branch on a scheduled date for offline counselling.

HF explained, “When changing to the trust type, homeowenership is transferred to HF, which means that at the time of subscribers’ or spouses’ deaths, it may take more time to make ownership transition to children or other legal heirs due to the trust termination processes. So it is recommended to have discussions with children or other stakeholder before making a transition.”

HF CEO Choi commented, “ With the product improvement, it is now possible for customers to change a collateral establishment method depending on their circumstances, even after they opted a certain method. We will continue our efforts to give more choices to home pension subscribers for better customer convenience.”