The senior population in India is predicted to grow by 19% in the next two decades. Subsequently, the amount of reverse mortgage is also likely to increase as more senior citizens are inclined to planning their retirements sincerely.
Reverse mortgage is a financial product specifically designed for senior citizens where they can mortgage their property (mainly residential) with a lender and they don’t have to make any monthly repayments.
What is a Reverse Mortgage?
The reverse mortgage scheme seems to be the apt solution to help senior citizens fund their financial contingencies and other expenses. It not only generates a regular income, but also relieves the owner of ways to manage funds by providing them a financial security.
It is clearly an interesting and profitable scheme as it does not involve selling of the property, but generates a regular income. As a senior person, you would like to live a post-retirement life with ease and less discomfort. Reverse mortgage lets you live a tax-free life. However, you can choose among types of loan against property for various other benefits.
Features of Reverse Mortgage
Reverse mortgages enable a senior to be financially independent by providing monthly monetary payments. The features are as follows –
- You will be disbursed on a monthly or quarterly basis. The loan gets repaid till the tenor, provided the borrower is still alive and holds the ownership of the property.
- Disbursements will extend till the end of the loan tenor. Reverse mortgage loan repayment is subject to restrictions – the expiry of the borrower, if the borrower sells the property or does not reside in it.
- The borrower is not required to pay any amount to the lender.
Therefore, the loan is an effective and convenient way to generate income without any potential hassle for the borrower or for the lender.
Benefits of Reverse Mortgage
Besides a regular income, the potential benefits of availing reverse mortgage are as follows –
- Flexibility in use: There is no end-user restriction and you can use the loan for whatsoever you want as per your requirement.
- Consistent income: It is one of the prime benefits of this scheme, providing aged individuals with just what they do not have and require against the intrinsic value of their property. A regular income to meet the daily needs is one of the biggest advantages of this loan scheme.
- Minimum prerequisites: Minimal formalities make it even easier for individuals to avail this loan. You do not need to showcase anything other than a property and 60 years age.
- Repayment benefits: At the time of repayment, you are liable to pay only the market price of the mortgaged property. Loan amount is not considered in such cases.
- No defaulting risk: One of the best reverse mortgage benefits is that it does not attract any risk of default by the borrower. As the owner tends to remain in possession of the property till the end of his/her life, the lender can enjoy risk-free lending.
Additionally, you can learn how to use a loan against property and benefit from it while enjoying ownership of your property without any clause of non-residence or leasing strictures.
Eligibility of Reverse Mortgage
The reverse mortgage India has the best and minimum requirements to be eligible for reverse mortgage loan. They are as follows –
- The person must be at least 60 years of age.
- The property to be mortgaged should be at least 20 years old.
- The property must not hold any issues relating to liability or litigation.
With Bajaj Finserv, you can avail this loan at an affordable rate of interest and against minimum documentation. Besides, you can check your pre-approved offer by providing only a few basic details online. Pre-approved offers help save time by making the process of availing loans easier and simpler.
Additionally, you can also avail a loan against property from Bajaj Finserv by keeping your property as mortgage. The interest rates are competitive and you can avail a lump sum amount of up to Rs. 3.5 Crore.
Besides, there is minimum documentation required here unlike in case of a reverse mortgage. Also, you can enjoy a hassle-free loan approval as well as disbursal. It is beneficial for users who are looking for a larger loan amount to meet their demands.
Reverse mortgage can be an appropriate solution for senior citizens to generate regular income although a loan against property too can suffice to provide the necessary financial backing. Nevertheless, you need to assess your financial condition and preferences before you choose a specific loan scheme.