| Banksloanonline » Banks Loans » Mortgage Loans » Reverse Mortgage Loans |
Reverse Mortgage Loans |
| Reverse mortgage loans are a kind of financial security that the senior citizens are entitled to enjoy. Owing to the fact that with age, social and financial security becomes an issue with most seniors, several countries in the world have taken up steps to better the scenario for the aged citizens and one of them being the policy of reverse mortgage loans. These are also popular as the reverse mortgages in most countries where they are prevalent. |
The salient features associated with Reverse mortgage loans have been discussed in this article so that you/ senior members in your family could be benefited from the same.
- The minimum eligibility to be able to apply for the reverse mortgage loans in India as well as in most countries of the world is that the applicant should be over 60 years of age. This age limit stretches to up to 62 years as well in a few countries.
- The applicant should own a housing property against which the loan would be applied for
- Unlike other mortgage loans, the reverse mortgage loans need not be repaid
- Up to 60% of the value of the property can be applied for by the borrower and the lender that is generally a bank or any other financial body will pay the amount in periodic arrangements that may even stretch up to the entire lifetime of the borrower.
- The reverse mortgages remains valid till 15 years at the maximum.
- Installments in terms of monthly, quarterly as well as annual or even a lump sum arrangement can be opted for by the borrower.
- Since the borrower is not required to repay, the bank will cover up the amount of the loan along with the interest by selling the property after the death of the owner. The bank is also entitled to sell before the death in case the owner chooses not to stay permanently in that property. Even in cases like this one, the owner or the heir(s) can opt to prepay/ repay the loan along with the interest and retain its ownership permanently.
However there are a few cons associated with the reverse mortgage loans as well. Features like maximum loan tenure of 15 years means that someone who lives longer than that will no longer be entitled to the loan. Also, these mortgages are at high risk of interest rate movements and are directly affected by any change or alteration in the rates in the market scene.
|
|
|
