This loan bought revolution in many financial aspects ,primitive types of loans like home loan car loan and many other loans are well known by everybody but
this is a new type of mortgage loan introduced by government of India in 2007-08 yearly Union budget. This is a special loan for senior citizens. Many senior citizens in India do not have a steady or adequate monthly income. But they do own a piece of property. So here they can opt for reverse mortgage which is exactly opposite of mortgage loans. They can keep their property as mortgage to the bank or any other financial institutions and the lender pays them a regular amount every month like EMIs. The lender sells the property upon the departure of those senior citizens. The loan amount paid to them is deducted from the amount in which the property is sold. The remaining amount is given to the legal heirs of those senior citizens.
Here lender then pays them a steady amount of income every month like EMIs. On the death of the senior citizen, the bank or the NBFC has the right to sell the property
Who is Eligible for a Reverse Mortgage?
To be eigible for reverse mortgage loans in India the follwing are the requirements:
- Age 62 years or older
- The residing house must be in his name or jointly with his spouse.
- House must be in good condition.
- The house should be free of debt and have clear titles