The Reverse Mortgage Loan was launched in India in 2007 to enhance and help the life of senior citizens who owned personal property. This was a measure to entitle them to fulfill their daily expenses related to basic sustenance like food, medicine, maintaining their house, etc. Reverse mortgage loan comes as a savior when most people after 60 don’t have a regular source of income in India. There is no gender differentiation for availing the loan facility, and if applying for a joint loan, then the age limit for the spouse has to be 55 years or above. The loan is not given against inherited property, so the applicant must have their own purchased house.
Just like a salaried or self-employed individual, senior citizens and retired individuals also need funding to meet any unforeseen financial emergencies. A financing option like a reverse mortgage loan can meet these needs.
A reverse mortgage loan is a unique credit alternative for individuals over 60 years and not having a regular source of income. The borrower does not need to make monthly payments after availing this loan. As the name suggests, the individual will have to mortgage their residential property and repayments are done only if the borrower has passed away or moved out of the house or sells the property. Once the loan is sanctioned, the borrower can receive the loan amount in the form of a monthly payment, as a lump sum or line of credit to meet their financial requirements. The loan amount to be credited is determined based on the value of the house to be mortgaged.
Reverse mortgage assures the financial support and independence to the borrowers in their old age. The biggest advantage is that there is no immediate financial liability on the borrower as they do not need to repay the loan amount in EMIs. When the borrower avails a reverse mortgage by mortgaging their residential property, they also enjoy the privilege to continue to own and live in their mortgaged property.
Age of the borrower, market value of the property and interest rates are the minimum requirements on which the loan is granted.