can any one pls explain me about revers mortgage scheme
by mortgaging his residential house property
It is a type of mortgage in which an owner of a residential property in Indian can borrow money against the value of his or her home. A reverse mortgage provides stream of income flows which normally senior citizens can tap into for their retirement. Borrower need not have any income nor is his credit record relevant as the loan is being secured by the underlying property.
Under the reverse mortgage, borrower will have various options to receive the loan, either lump-sum, monthly payments or a line of credit. Amount received not considered as income chargeable to tax since the loan advances are disbursement of the principal and not income. No repayment of the mortgage (principal or interest) is required until the borrower dies or the home is sold. The loan amount can either be repaid by the borrower, his/her legal heirs.
All one needs to ensure to avail a reverse mortgage loan is to have an own house with no encumbrances.
Loan eligibility
The approved financial institution being any scheduled bank of housing finance company may disburse the loan to the reverse mortgagor by any one of the following modes namely.
a. Periodic payments to be decided mutually between the institution and the reverse mortgagor.
b. Lump sum payment in one of more tranches, to the extent that the aggregate of the amount disbursed as lump sum does not exceed fifty percent of the total loan amount sanctioned.
The loan so granted under reverse mortgage shall not be for a period of more than 20 years from the date of signing the agreement by the reverse mortgagor and the approved financial institution. The reverse mortgagor, or his legal heirs or estate, shall be liable for repayment of the principal amount of loan with interest to the approved lending institution at the time of foreclosure of the loan agreement.
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