What is reverse mortgage loan?
Senior citizens owning a house but having inadequate income to meet their needs can opt for reverse mortgage loan.
A homeowner who is above 60 years of age is eligible for reverse mortgage loan. It allows him to turn the equity in his home into one lump sum or periodic payments mutually agreed by the borrower and the banker.
Here he can avail loan based on his house. No repayment is required as long as the borrower lives.
However, borrower should pay all taxes relating to the house and maintain the property as his primary residence.
Amount can be used for following purposes
- Up gradation, renovation and extension of residential property.
- For uses associated with home improvement, maintenance/insurance of residential property
- Medical, emergency expenditure for maintenance of family
- For supplementing pension/other income
- Meeting any other genuine need
However, using reverse mortgage amount for speculative, trading and business purposes shall not be permitted.