REVERSE MORTGAGE BY SENIOR CITIZEN

With the National Housing Bank coming out with guidelines for reverse mortgage, the contours of this new product for senior citizens are now becoming clear. Under the scheme, senior citizens can consider earning a monthly income by pledging their home with a Housing Finance Company (HFC) or a bank even while they continue to occupy it for a life time. The borrower is not required to service the loan during his / her lifetime or make monthly payments. On the borrower’s death or on the borrower leaving the house permanently, the loan is repaid along with accumulated interest through sale of the house property. Alternatively, the borrower or his / her heir can repay or prepay the loan with accumulated interest and have the mortgage released without resorting to sale of the property. The highlights are: -

• Those in the age bracket of 60-70 will be eligible for 45% of the value of a property pledged with a lender. 
• For those aged 71-75, the amount is 50% .
• For individuals in the age bracket of 76-80 it is 55%. 
• For those aged over 80, the amount is 60%.