KINGSTON, Jamaica, December 18, 2016 (CMC) – The former co-chair of the Economic Program Oversight Committee (EPOC), Richard Byles, is urging the Jamaica government to consider implementing a reverse mortgage program as an additional source of funds for retirees.
Byles, the Chief Executive Officer of the Sagicor Group, said a reverse mortgage would enable retirees to borrow against their home’s equity, while maintaining ownership of the property.
Under this scheme, no repayment of the mortgage, principal or interest is required until the borrower dies or the home is sold.
“You get a sum of money, which is paid back by you, your beneficiaries and family, or the house is sold and the loan repaid. You continue to live in that house, but in the meantime, you have the benefit of the equity in your house,” he said.
Byles said a reverse mortgage would empower a wide cross section of Jamaican seniors who are homeowners, as it does not require a monthly payment and would make up for any shortfall in pensions due to inflation.
“This is a good idea, because it gives you funds that are better used by you to deal with your health [for example]. This is something that we in Jamaica should look at,” he added.
Byles, who was addressing the Jamaica Government Pensioners Association’s Christmas luncheon, last week, also recommended that the Financial Services Commission (FSC) look into the regulatory guidelines that would be required to develop such a program.
“Many pensioners own a house and they should have the option, under the right regulatory framework, to be able to extract the equity from their houses and to use it as they see best,” he said.