Reverse Mortgage (Home Loan)

Reverse Mortgage (Home Loan)

What is it?

A reverse mortgage (or lifetime mortgage) is a loan available to senior citizens. Reverse mortgage, as its name suggests, is exactly opposite of a typical mortgage, such as a home loan.


How does it work?

In a typical mortgage, you borrow money in lump sum right at the beginning and then pay it back over a period of time using Equated Monthly Instalments (EMIs).

In reverse mortgage, you pledge a property you already own (with no existing loan outstanding against it). The bank, in turn, gives you a series of cash-flows for a fixed tenure. These can be thought of as reverse EMIs.

What happens after the death of one or both of the spouses?

If one of the spouses dies, the other can still continue living in the house. If both die, the bank will give their heirs two options — settle the overall outstanding loan and retain the house, or the bank will sell the house, use the proceeds to settle the outstanding loan and give the rest to the heirs.


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  • Rishika says:

    Short yet informative! thanks for the article Shreekant.

  • sarmakj says:

    sorry some words are found missing …. please read from ” he would like like to purchase 3 BHK apartment from” M/s Ajmera Builders and Developers …… [remaining are ok.]

    • Dear Sarma ji,
      Personally, I prefer buying a ready-to-move flat to an under-construction one. The price of a ready to move one can be on the higher side but its ok if one can afford it.

  • sarmakj says:

    Dear Mr. Reddy, My son is working in Bangalore and he would like to purchase Ajmera BUilders and Developers. They started a new venture and for booking they are asking 12 lakhs as advance for booking 3 BHK apartment which will be in possession to us during 2020 year.
    Please advise us whether to go deal with Ajmera Builders and developers as we do not know about the said builders any thing OR advise how to proceed in this manner

  • Mohit kumar says:

    Dear Reddy
    I m Mohit Kumar . I HV applied for mudra loan . but bank refused to give me a loan . but i have all leagal paper . but they are saying to fixed amount against loan. In my area there r 3 public sector bank – BOB , PNB, central bank of India. All R asking for fixed deposit.
    Area- amauli,
    Dist- fatehpur,
    Pin- 212631,
    Up India

  • Pronob Kumar says:

    Dear Mr Reddy,
    Thank you for the information given above. My wife and daughter have bought a flat in a multi-storey aptt. in Andheri and got it registered in their joint names in June 2009. The builder has still not given us a copy of the Occupancy certificate and has still not formed a building society. We the flat owners have met him several times and requested him to do so but he has not obliged. He is running the maintenance and day to day activities like water electricity and security services by appointing some of the flat owners as members of a (proposed) society without forming a society or holding any elections. Kindly tell me :
    1) What is the legal standing of this proposed society?
    2) Can they issue bills for maintaiance and enforce its collection ?
    3) Can they legally charge interest on unsettled bills which have been disputed by flat owners because no accounts of previous years collections and expenses from 2010 till date have been presented before the flat owners.
    4) What is the best course of action ??
    Many thanks.

  • imtiaz says:

    good work sreekanth .the informations was very useful about mudra loans

  • abhinav kanchan says:

    Well done, clarity of thought and use of simple sentences makes understanding so much easy. keep it up Sreekanth. thanks and regards,

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