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If you had opted for a loan of 10 years for the same property, you would have received Rs 34,560 per month for 10 years. Now, you know where this number came from. If you invest Rs 8,000 per month in an instrument that returns 12.0% for 20 years, you will have Rs 80 lacs at the end of 20 years. Why Rs 8,000 and no other number? Simple. This is nowhere close to Rs 80 lacs that we were talking about. Rs 8,000 per month for 20 years adds up to Rs 19.2 lacs. So, if you take a reverse mortgage loan for 20 years and the prevailing rate is 12.0%, the bank will pay you Rs 8,000 per month. The bank will give an amount per month that, by the time payment period ends, will become Rs 80 lacs. Now, that does not mean the bank will give you Rs 80 lacs. The margin could be 10%, 20% or any other number depending upon lender’s policy.įor instance, if the value of your house is Rs 1 crore and lender keeps a margin of 20%, you can get a loan equivalent of Rs 80 lacs. ![]() While offering such loans, the banks typically keep a margin. The amount of loan depends on the value of the property, age of the borrower and the prevailing interest rate. How Much Amount Do I Get under Reverse Mortgage Loan Facility? This is because the bank relies on sale of such property to get back its investment (loan). What matters is the market value (or assessed value) of your residential property. Hence, there is no point in considering the repayment ability of the borrower. However, in reverse mortgage loans, the borrowers are not required to pay anything back to the bank during their lifetime. This is in sharp contrast to any other kind of loan, where your repayment ability is the primary criterion. Your Income Is Not Considered during Loan Sanction You cannot avail RML facility against a commercial property.You cannot avail the facility for a let-out property.The lender may look at multiple factors such as general correspondence, utility bills, taxes and bank account statements to establish if the property is indeed your permanent residence. You must be using the property as your permanent primary residence. The property must be a self-occupied property.The residual life of the property should be at least 20 years.The property should be free of any encumbrances. You must be the owner of the mortgaged property.Respective financial institutions may have even stringent policies. At least one of you should be above 60 and the other should be at least 55. You can also apply along with your spouse. You have to be over 60 years of age to be eligible to avail Reverse Mortgage Loan Facility.After your demise (demise of both you and your spouse), your legal heirs have the first right to settle the loan with the bank and take back ownership of the house.You can repay the loan whenever you want to and take back full control of the house. ![]() the lender cannot force you to make any payment or ask for additional security.
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