Should You Opt for Reserve Mortgage Loan
A reverse mortgage loan is a loan that allows any individual to have a loan against their home which acts as a security. This is the form of a loan that is allowed after the age of 62 years. This is done for those aged people who don’t have any other sources of income or financial help. This is a very rare form of loan that people take in a very rare situation. On the other side of the coin, if there are any other taxes of property, the homeowners are required to maintain the property in a good condition while the other things are not so influenced.
The most important fact is that for being eligible he/she should be a citizen of India with the age limit of 60 years and whole for the couples if one is above 62 years then the other person should not be below fifty five .
Some of the features of a Reverse mortgage are as follows-
Loan amount-The loan amount in the reverse mortgage loan can be 70-90% of the value of the house. It depends on many situations like the location, condition, and the land position of the house. A proper valuation is done from the loan-providing institutions then only the further procedure is taken forward. a separate team is being implemented for the particular purpose, who inspects so that no further complication arises after the loan is being sanctioned. In some of the cases, the loan limit is near 1 crore . The couple if survives can continue living in the same house but then will not have the ownership of the house to sell it to any other kind of third parties.
The time period-It is done for the time of 11-15 years. On the other side of the coin if the couple survives then they can continue to reside in the same place. After the death of the applicants, the house will be sold in as much as the possible value so that the bank or any financial institution who is giving the loan will be able to bring back the money and if there any excess amount is left after selling the house or the property it will be handed over to the heirs of the deceased couples. It happens if the thing tackles place before the tenure term. If the couple wishes to leave the property permanently then also it can be done.
Rate of Interest-The rate of interest ranges between generally ranges between 12-15%.SBI offers the product at the rate of 12.65%. So before going for the loan or the reserve mortgage loan then these rates should be get compared with the other banks and financial institutions. It will give a better understanding that the least have to spent and the more have to earn. The interest rate varies from one place to another according to the customer’s suitability and situations. It was introduced in India in the year 2007-08.valuation of the property is kept on done between 3-5 regular revaluation to check the depreciation and its rate. What will be the estimated value so that the valuation of the house or property does not give that value and the company will be results into losses. Some of the banks which provide the reserve mortgage loans are the state bank of India, Bank of Baroda, Punjab national bank, and so on.
Sometimes it means there is no one to look after the aged person who was forced to live on the condition of others. It is ethical if the reason is so.
- There are few limitations of the reverse loan Mortgage are as follows-
- The loan provided here is always higher than the other forms of loans.
- The owner of the house may not be willing to hand over or willing to transfer the house to his/her heirs and for this, the actual recovery of the loan amount may get affected.
- The difference between the interest rates and the loan amount can lead to serious complications.
This loan is always preferred when there is no one with the aged couples or person without any help. But on the other side of the coin, it is a very good option when no one is there in providing help during the aged time stage of life. There can be some situations where the couple or the person can pay back within the tenure time and gets back the home.
No body wants to sell their home because after the body its the house only which also add as a part of our life inside our soul.