Reverse mortgage loans were introduced in India in 2007 to offer individuals a sustainable source of livelihood post retirement. It allows the beneficiary to mortgage his/her residential property and acquire a lump sum amount or receive periodic payment for pre-specified years. Using the funds, borrowers can support their day-to-day expenses, medicinal expenses, and any other financial needs.
However, like any other credit, it also accompanies a set of eligibility criteria that individuals should comply with to leverage reverse mortgage benefits.
Reverse mortgage loan eligibility criteria
The age of the applicant needs to be a minimum 60 years.
In case of joint loan, the spouse’s age should be a minimum of 55 years.
The property for mortgage should be owned by the applicant. Ancestral property is eligible for this fund.
The property age should be 20 years at least.
Borrowers need to occupy the property to avail the mortgage loan. A let out property cannot be mortgaged.
Both the applicant and his/her spouse can continue living in the property even after availing a reverse mortgage loan.
Applicants can reclaim the property ownership after the complete repayment of loan.
In case of applicant’s demise, the heir can repay the loan to reserve the ownership.
However, if one fails to meet the eligibility of this loan, he/she can alternatively opt for a loan against property from a reputed financial institution. A loan against property is available against much more relaxed eligibility requirements, and individuals can fulfil any financial liability with the funds.
Knowing these crucial factors, eligible individuals can avail of a reverse mortgage loan to meet the necessary expenses during older age.
