Source of income for aged people
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Married couples who have crossed 60 years of age will be eligible to participate in the reverse mortgage loan scheme.
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Under the draft reverse mortgage loan (RML) guidelines issued by the National Housing Bank, the bank or housing finance company (HFC) will recover the loan along with interest on death of the owner or expiry of mortgage period by selling the house and remit the excess amount to the owner or his heirs. The owners will also have the right to repay the loan to discharge the mortgage.
As per the guidelines, married couples having crossed 60 years of age will be eligible to participate in the scheme as joint borrowers provided they are using the property as their permanent residence.
As the scheme is restricted to residential property used as residence, commercial property will not be eligible for reverse mortgage loan.
The guidelines further state that senior citizens aged between 60 and 70 can obtain loan up to 45 per cent of the value of the property; between 71 and 75 up to 50 per cent; between 76 and 80 up to 55 per cent and above 80 up to 60 per cent.
The amount of loan will depend upon the market value of property to be determined by an approved valuer.
The residential property, as per the guidelines, will have to be valued frequently and in no case later than five years to adjust the quantum of payment whether periodic or lump-sum amount to the house owner.
The funds obtained under the scheme, as per the guidelines, can be used for specified purposes which include gradation and maintenance of house; medical and emergency expenditure for maintenance of family; supplementing pension and other income; repayment of an existing loan taken for the residential property to be mortgaged; and meeting any other genuine needs.
The house owner will also have the option to move out of the residence to an old age home or to live with relatives after settlement of loan by selling the property.
The reverse mortgage guidelines are likely to be finalised and operationalised by May-end. — PTI
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