Senior citizens who require financial aid for monetary independence, emergency, and well-being can avail a reverse mortgage loan. This is a secured loan, where individuals above 60 years of age, owning residential property can mortgage the same for financial assistance.
Features of reverse mortgage
Meet long term financial needs
Borrowers do not need to repay the loan amount. Instead, they can earn a periodic payout which coincides with the property valuation.
No restriction on end-use
The reverse mortgage loan offers complete freedom to borrowers to use the loan amount as per their needs and requirements.
Age of the property is important
The property must be at least 20 years old and under possession of the prospective borrower to qualify for a reverse mortgage.
Reside in your property after opting for a loan
Borrower/s must reside in their properties after availing such a loan.
Benefit while repaying the loan
Contrary to most loans, the borrowers need to repay only the market value of the concerned property, regardless of the actual loan amount.
Yet, a major drawback of this loan is that a borrower’s children or family members need to repay this loan after his/her death. Thus, as an alternative option, you can avail loan against property for a lump sum disbursal which can also be used without any end-use restriction.