Should Senior Citizens Avail A Reverse Mortgage Loan?

A reverse mortgage loan is a credit facility that is specifically designed for individuals above the age of 60 years. It was introduced in India in 2007 by the Indian government and subsequently adopted by different private and public-sector financial institutions.

This financing scheme was introduced to facilitate senior citizens to gain a source of income which they could utilize to meet their post-retirement expenses. It could involve medical expenses, food, living, etc. Reverse mortgage in India enables senior citizens to avail of an income source by pledging their property.

Is A Reverse Mortgage Scheme Ideal For Senior Citizens?

A reverse mortgage loan requires individuals to mortgage their property to avail a periodical income source for a specific tenor. In case you have a substantial corpus to meet your post-retirement expenses, you can decide otherwise.

Other than that, when you mortgage your property, you are entering a contract with the financer, where you are authorizing them to liquidate your property after you decease or move out of it, in the event you do not repay your loan.

A reverse mortgage loan in India might be ideal if you want your next of kin to retain the property after you or your spouse passes away.

As such, you can consider opting for a loan against property. In this case, you are liable to repay the loan within a specific tenor, which can go up to 20 years and instead are offered with a lump sum amount.

There are three types of loan against property which you should know about – loan against a residential property, loan against commercial property, and loan for lease rental discounting.

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However, if you do not have any source of income and require an only monthly disbursal to meet your expenses instead, then you can opt for a reverse mortgage credit facility.