The Reverse Mortgage loan Scheme offers financial support particularly to senior citizens, who are usually not keen to sell their home. But, the issues like dependency on children or low pension rate push them to take such a hard discussion. Apart from the retired people, the about to retire citizens also think about how to have a financial stability in life post-retirement. But, now it’s time to smile and enjoy life as the availability of Reverse Mortgage Loan Scheme is the best way to live an independent life till last breath.
This loan type is new in India but the introduction of this financial assistance for the people especially when they are old is beneficial and also incorporates confidence to lead a happy life. Scroll down to know details about the Reverse Mortgage loan Scheme.
Basics of Reverse Mortgage Loan:
This loan is opposite to home loan and the applicant here receive disbursed amount partially which may in an installment, Lumpsum amount or a credit note. Although, the repayment of the same shall be done in one go. This clearly means that it is compulsory to deposit the complete loan amount in one-time.
Valuation of Reverse Mortgage Loan:
The property value/property cost decides how much loan amount can be disbursed to an applicant. Other than this, the age of borrower and the interest rate are two main factors that every bank/financial institution consider prior to the sanction of a reverse mortgage loan. A person can avail a maximum of rupees 50,000 in installments and 50 percent/ 15 lakhs rupees according to choice under Lumpsum disbursal.
Usage of Reverse Mortgage Loan:
Firstly, this sanctioned fund can be utilized for the payment of medical treatment of yourself and spouse. Also, you can avail this loan to undergo a medical treatment.
Secondly, you can fulfill daily needs, medical emergency, home renovation and also for paying back the home loan availed for the property in which the borrower is currently residing.
Thirdly, the lender of this loan can directly pay to the Life Insurance Company if the borrower of Reverse Mortgage loan applied for the same in order to purchase an annuity.
The borrowers can’t use this loan amount to carry out any business transaction or for a trade purpose.
Eligibility Creteria and Documents Checklist to Apply for Reverse Mortgage Loan:
The applicant should be of 60 years or above. This loan can be availed jointly too and in case of joint loan application, the spouse should age 55 years or more.
The current property in which the couple/person is residing should be entitled to his/her name in case of single loan application. The borrower and co-borrower must own the property jointly in case of a joint Reverse Mortgage loan.
The application will be rejected in case the loan is applied against any secondary property means second home where the applicant is not currently residing.
The property against which the applicant is having an outstanding loan is not eligible for availing the Reverse Mortgage Loan.
Submission of PAN Card is necessary to be attached with the loan application form.
Copy of Registered will and the name list of legal heirs.
The lender must be notified about modification if planned in future.
Filling up of personal details with the application form of Reverse Mortgage loan.
Term Period of Reverse Mortgage Loan:
The borrower can avail this loan for maximum 20 years. The person is eligible to continue living in the same property even after receiving the disbursed amount till completion of the tenure. Apart from the borrower, his/her spouse can reside in the same property even after the death of borrower till his/her death.
Repayment Procedure of Reverse Mortgage Loan:
Being a senior citizen, the borrower is not required to pay any interest rate or charging for availing the reverse Mortgage loan amount. Also, the borrower can repay the entire loan amount anytime he/she wish to close this loan account. In case of borrower’s death, his/her legal heirs are required to pay the outstanding loan amount to get the property back in their custody.
The lender has the right to sell the residential property/house to recover the sanctioned loan amount if the legal heirs won’t agree to pay back the outstanding loan. Although, the bank can’t keep the entire amount and hence they are dutiful to return the surplus amount collected from the selling of the property/home back to the legal heirs of the borrower.