Reverse Mortgage In India

Feb. 3, 2011 - PRLog -- With globalization shaping the minds and lifestyle of people in India, and joint family system giving way to a nuclear one, older Indians want to spend their twilight years off their corpus of savings. But they just might discover that they have not planned for every need and contingency. Thus there could not be a better timing to introduce reverse mortgage loans in India as a practical solution.
There is a new ray of hope in the area of mortgage loans for senior citizens In India. Against the backdrop of an increasing old age population and life expectancy, rising costs of medical expenses and cost of living, Reverse Home Mortgage has been aptly introduced in Budget 2007-08 perceiving a potential market in India. Reverse mortgage business opportunities will also spur the economic activity of India.
What is Reverse Mortgage?
Reverse Mortgage is a loan scheme that allows senior citizens aged 62 years and above to pledge their house property to a reverse mortgage lender (scheduled bank or HFC) in return for a lump sum or periodic payments spread over the borrower’s lifetime. This contract between the homeowner and the financier enables the homeowner to receive a stream of income, especially in retirement, from the future realizable value of the home.

Mechanism:
Throughout the period that a reverse mortgage loan is outstanding, the borrower owns the home and holds title to it, without being obliged to make any monthly mortgage payments towards repayment or servicing of loan. On his demise or leaving the house permanently, the loan is repaid along with accumulated interest, through sale of the house. Any excess amount will be remitted to the borrower or his heirs. The lumpsum or periodic payments can be utilized by the borrower for his needs except speculative purposes.
In a nutshell, reverse mortgage boils down to converting the equity in a house property into an income stream. In real estate, equity is the difference between what a property is worth and what the owner owes against that property (i.e. the difference between the house value and the remaining mortgage or loan payments on a house). You can thus make the highly useful variation of home mortgage work for you.
For more details contact the Expert Real Estate / Property Attorneys & Lawyers at :
Global Lawyers
Call: 0091 9810153965
Visit : http://www.globallawyers.in

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