HF adjusts JooTaekYeonKeum ("JTYK") mortgage insurance premiums
- Date 2015-01-29
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HF adjusts JooTaekYeonKeum ("JTYK") mortgage insurance premiums
- Initial JTYK premiums lowered and annual JTYK premiums raised -
Korea Housing Finance Corporation (HF, CEO Kim Jae-Chun) stated on the 29th that it will lower its initial JTYK*
mortgage insurance premiums and raise its annual premiums from this February. The move is part of its
efforts to ease the premium burden on senior citizens who wish to subscribe to the JTYK reverse mortgage loan
for a stable cash flow in their post-retirement years.
* JooTaekYeonKeum (JTYK) is a state-guaranteed reverse mortgage loan in which senior citizens 60 years
of age or above provide their owned home as collateral and receive living expenses for their post-retirement life
in the form of monthly pension benefits either for the rest of their life or for a certain period of time.
More specifically, HF ▲ has cut the one-time initial mortgage insurance premiums, which are charged at the time
of subscription to JTYK, from the existing 2.0% of the appraised value of the home to 1.5%, while ▲ increasing
the monthly-paid annual premium from the current 0.5% of the outstanding loan balance to 0.75%. Given that
a reduction in the initial mortgage insurance premiums alone would result in a subsequent drop in the monthly
disbursements, HF also decided to raise the annual premiums which accrue over time, thereby ensuring that monthly
disbursements remain the same even after the changes. The premium changes apply to those who newly join
the JTYK program from this February onward and have no retroactive effects.
An HF official said, "Up until now, we have received numerous complaints and concerns from our JTYK borrowers
about the burden of the initial premium charged at the time of subscription. With the premium adjustments,
we have reduced it to 75% of the original. We expect that this cut will relieve the premium burden on new
JTYK subscribers." He also added that HF will continue to improve its JTYK loan program, making it a must-have
loan scheme for elderly people who wish to fund their retirement.