Reverse Mortgage Agreement Template for Philippines

The Reverse Mortgage Agreement is a specialized financial instrument used in the Philippines when elderly homeowners wish to convert their home equity into accessible funds while continuing to live in their property. This document is essential when establishing a reverse mortgage arrangement, particularly for seniors who want to supplement their retirement income without selling their home or making monthly loan payments. The agreement must comply with Philippine banking regulations, property laws, and consumer protection standards, including requirements set by the Bangko Sentral ng Pilipinas. It covers crucial elements such as loan terms, property obligations, borrower rights, default provisions, and repayment conditions, typically triggered by the borrower's death, permanent move-out, or property sale. The document is structured to protect both the lender's security interest and the borrower's rights, with special consideration for the unique aspects of reverse mortgages in the Philippine context.

1. Parties: Identifies the lender (financial institution) and borrower (property owner), including their complete legal names, addresses, and contact details

2. Background: Explains the purpose of the reverse mortgage, confirms the borrower's ownership of the property, and states the borrower's qualification for the reverse mortgage

3. Definitions: Defines key terms used throughout the agreement, including technical banking terms and specific reverse mortgage concepts

4. Property Details: Comprehensive description of the mortgaged property, including its legal description, title details, and current market value

5. Loan Terms: Specifies the maximum loan amount, interest rate, method of disbursement (lump sum or periodic payments), and terms of compounding interest

6. Borrower's Obligations: Details the borrower's responsibilities including property maintenance, payment of taxes, insurance, and other ongoing obligations

7. Conditions for Loan Maturity: Specifies events that trigger loan repayment, such as death, permanent move-out, sale of property, or breach of agreement terms

8. Property Sale and Settlement: Procedures for property sale and loan settlement when the loan becomes due

9. Rights of Occupancy: Confirms the borrower's right to occupy the property for life, subject to meeting ongoing obligations

10. Insurance Requirements: Specifies required insurance coverage for the property and any additional insurance requirements

11. Default Provisions: Defines what constitutes default and the lender's remedies in case of default

12. Representations and Warranties: Statements of fact and promises made by both parties

13. Governing Law and Jurisdiction: Specifies that Philippine law governs the agreement and identifies jurisdiction for dispute resolution