Reverse mortgage loans, though not quite popular in India, is a financial product that immensely aids individuals post-retirement. These loan schemes offer a monthly disbursal to borrowers.
The reverse mortgage schemes are especially helpful for retirees who have high-value properties but not much of cash at hand. These loans are granted against the mortgage of such properties. Loans against property are an alternative to these schemes and enable borrowers to retain their property with EMI payments.
The primary features of these loan schemes are as follows –
# No Risk Of Defaulting: There is no risk of defaulting with such a loan. Borrower/s are offered a disbursal as per their chosen period.
However, the borrower/s or his/her kin may lose ownership of the property to the financier in case of non-repayment. Since these loan schemes are to be repaid at the end of tenor, financial institutions have the option to use the mortgaged property as an asset.
# CIBIL Score Is Not Required: A vital feature of this loan scheme is that financial institutions do not check the CIBIL score of the applicants. As a result, it is easy to avail such a scheme.
# Repayment Benefits: A crucial benefit of reverse mortgage in India is that during repayment, borrowers have to pay as per the market-value of the property when the reverse mortgage was availed. This can effectively reduce the burden.
Reverse mortgage loan in India can be an effective way for senior citizens to secure their financial requirements even when they are not generating income. Senior citizens can also apply for a loan against property and avail its several benefits.