A reverse mortgage loan is a credit form that works as an additional funding source for senior citizens. Homeowners aged 60 years or above can leverage the equity of their property to avail these funds. Here the loan value is based on factors such as borrower’s age, property value, interest rate, and lender’s margin.
To understand this credit better, individuals must become familiar with reverse mortgage benefits.
Features of reverse mortgage loan
No monthly repayments
There is no mandate to make monthly repayments. Borrowers can receive funds through reverse mortgage in a lump-sum or monthly pay-outs basis and need to repay the amount borrowed only after the completion of loan tenor.
Moreover, this reverse home mortgage loan comes with a flexibility of usage.
Security from defaulting
The mortgaged property remains in the name of the owner until he/she decides to leave the place permanently, or till the owner’s demise.
Repayment facilities
Unlike loan against property where individuals have to pay monthly EMIs per the applicable mortgage loan rates, a reverse mortgage does not require borrowers to make any monthly payments.
Simple eligibility criteria
The reverse mortgage loan benefits also include simple eligibility. Individuals who are aged at least 60 years and have an ownership of the property for minimum 20 years can avail this credit.
Before applying for this kind of credit, individuals must compare it with different advances like a loan against property. This would aid them in differentiating the variables related to reverse mortgage loan and LAP loan.
