During the old age, when you retire from job, the major tension will be around financial crisis. That time, daily expenses will be remain same, but will not have any source of income. Apart from pension schemes, there is another way to secure money after retirement. That is Reverse Mortgage Scheme.
What is Reverse Mortgage Scheme?
A reverse mortgage is a unique scheme designed for senior citizens over 60. Unlike a typical loan, instead of paying the bank, the bank lends you the money. Your home remains mortgaged to the bank, but you can live in it for the rest of your life and receive a fixed monthly payment from the bank, much like a pension .
How much payment will you get?
Now, how does the bank determine how much money you’ll receive each month? The simple formula is: the higher your home’s value, the higher your monthly income. The bank first assesses your home’s current market value, then calculates the amount based on your age and the terms and conditions. Suppose your home is worth around ₹ 50 lakh, you could receive approximately ₹ 20,000 to ₹ 30,000 per month. It’s the same house, but now it ‘s earning you monthly rent without you having to sell or leave it!
The biggest advantage of this scheme is that no installments are required throughout life. As long as the homeowner is alive, the bank continues to make payments. After the homeowner’s death, the bank recoups its money by selling the home. If the family wishes to keep the home, they can repay the remaining amount and take it back. If the home’s value exceeds the loan amount, the remaining amount is returned to the heirs.
Who can take advantage of this?
This scheme is approved by the Reserve Bank of India ( RBI ) and supported by the central government. Several banks, such as SBI, PNB, and some private banks, offer it. The requirements are that the applicant must be over 60 years of age. The home must be in the owner’s name and debt-free. The home must be located in India. If the property is owned by both spouses, both are included in the loan agreement.