reverse mortgage An additional source of income for senior citizens, besides fund They have deposited, there may be a reverse mortgage. Here, the home owned by the senior citizen is mortgaged with a bank, which pays a predetermined amount during the term of the mortgage. After the term is over, the ownership of the house is transferred to the bank.

Who can avail this facility?

To take advantage of this scheme, the applicant should have his own house. Any person who is 60 years of age or above can avail the benefit of reverse mortgage scheme. In case of married couple, at least one of them should be 60 years of age or above. The remaining life of the home to be mortgaged must be at least 20 years or more. The property should be self-occupied by the applicant and should not be let out on rent. It should also be free from any legal claims or load.


How much? loan Can be availed?

The loan amount depends on the current market value of the property at the time of applying for the loan. majority of

financial institution Keep a margin of 20% on this value and sanction the loan on the remaining 80%.

How is it paid?

The applicant can choose to receive the disbursement in two ways. They can either choose to receive the lump sum amount or can receive the money periodically for an agreed number of years.

repayment

The property remains in the possession of the applicant during his lifetime. In case of joint applicants, the loan can be recovered only after the death of both the husband and the wife. Applicants are not required to pay any amount during their lifetime.

things to note

• Borrowers can avail tax exemption from the amount received under reverse mortgage.
• At any point of time, the borrower can prepay the due amount and take back the asset.

Content on this page is courtesy of Center for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.