A "low interest" loan shouldn't mean you have very little interest in paying it back!
  • What Is A Reverse Mortgage?

    Reverse mortgage is a home loan wherein the borrower will receive the loan amount in monthly instalments for a house he/she owns. This is the opposite of a home loan where the borrower would have to pay monthly instalments to the lender.

    Reverse Mortgage Loan Eligibility Criteria

    • A reverse mortgage is available to anybody over the age of 60. In case a couple wishes to opt for one, at least one of the participants should be over the age of 60 years. Many banks require the other spouse to be 55 and above, while some require him/her to be at least 58.
    • The borrower must have a fully owned house. In case of a couple, at least one of them must own a house. In some cases, banks take over the home loan and pay off the balance in monthly instalments to the borrower.
    • The property must have been in existence for at least 20 years.
    • The property must be the permanent residence of the individual.
    • The property must be self-acquired, which means the property cannot be inherited or a gift.
    • Properties that are let out or being used for commercial uses are not eligible.

    Documents Required To Avail Reverse Mortgage

    The documents required to avail a reverse mortgage are mentioned below.

    • Permanent account number (PAN)
    • Aadhaar card
    • Registered will
    • List of legal heirs
    • Property details

    Top 3 Tax Benifits On Reverse Mortgages

    1. The income the borrower receives from the bank will be tax free.
    2. In the event that the house is renewed or repaired with this money, the amount spent on the renewal or repair will be eligible for deduction in computation of income.
    3. The repayment of the loan at the end of the loan term will not be considered deductible.

    9 Points To Remember In Reverse Mortgage

    1. A reverse mortgage is available to citizens of India who are over the age of 60. In case of a couple looking for a reverse mortgage, at least one of the participants must be over the age of 60, while the other has to be over 55 or 58 years of age, depending on the bank.
    2. The maximum loan provided under this scheme is 60% of the property cost, up to a maximum of Rs.50 lakh.
    3. The minimum tenure of the loan is 10 years while the maximum tenure varies from bank to bank.
    4. The borrower can either opt for monthly, quarterly, yearly or lump sum payments.
    5. The property must be revaluated every 5 years by the bank or housing finance company.
    6. The income received from a reverse mortgage will be tax free as it is considered a loan.
    7. The rates on a reverse mortgage vary from bank to bank and the type of loan the borrower has opted for.
    8. The processing fee of a reverse mortgage varies from 0.15% - 1.50%, depending on the bank.
    9. A borrower can prepay the loan at any point during the term of the loan without attracting a prepayment fee, in most cases.

    List Of Banks That Offer Reverse Mortgage Scheme

    National Housing Bank (NHB) Punjab National Bank (PNB)
    Central Bank of India Indian Bank
    Andhra Bank Dewan Housing Finance Limited (DHFL)
    State Bank of India (SBI) LlC Housing Finance
    Corporation Bank Canara Bank

    Drawbacks Of A Reverse Mortgage Scheme

    • Lengthy documentation is usually required in order to avail a reverse mortgage.
    • The monthly amounts are fixed and there will be no provision to increase this amount.

    Reverse Mortgage Scheme For Senior Citizens

    Senior citizens looking for a stable source of income can benefit from a reverse mortgage. Not only do they receive a steady source of income, but their heirs would profit from this transaction in almost all cases as the property value is bound to rise overtime and outweigh the loan amount.

    What Is A Reverse Mortgage In Simple Terms [With Example ]

    Introduced to the nation in 2007, a reserve mortgage has been a blessing to many looking for a stable income in the current economy. Vaguely, a reverse mortgage is the opposite of a home loan. In a reverse mortgage, the borrower will receive the loan amount in monthly instalments for a house he/she owns, as opposed to a home loan where the borrower will have to pay off the loan in monthly instalments to the bank.

    So how does the bank profit from this transaction? This can be explained in the following example. Let’s say that Mr. and Mrs. Raghav fully own a house worth Rs.1 crore in the city of Bangalore and are looking for a stable source of income as their two children haven’t begun earning yet. Aged 60 and 65 respectively, the Raghavs then opt to go for a reverse mortgage. On consulting with a bank, the bank agrees to approve a reverse mortgage of Rs.75 lakh for 15 years, payable in sums of Rs.42,000 monthly.

    At 80, Mr. Raghav passes away of old age. However, his wife still lives in the house and his two children are old enough to financially support the family. A few years later, Mrs. Raghav too passes away at the age of 85. The tenure of the reverse mortgage has now surpassed the 15 years initially agreed upon and is now 20 years old. The loan has therefore grown and currently amounts to Rs.1 crore.

    At this point, the property is then transferred to their children. The children now have two choices on how to go about closing the loan. They can either pay off the loan of Rs.1 crore and keep the property or they could sell off the property that will now be worth Rs.2.5 crore, pay off the bank and keep the difference. In this case, if Raghav’s children sell the house for Rs.2.5 crore, they will have Rs.1.5 crore for themselves after paying off the mortgage of Rs.1 crore.

    In the event that the borrower of a mortgage loan doesn’t have a legal heir, the bank will simply take possession of the house, sell it off and make a profit out of it.

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    Reverse Mortgage Reviews

    • DHFL Home Loan
      "Not satifactory service"
      0.5 1.0/5 "Really Bad"
      I got home loan with DHFL FINANCIAL INSTITUTION . I am not happy with the services even the customer service response is not so good . The loan amount which they gave was good but they charge very high rate of interest . Overall it is fine experience .
      Was this review helpful? 0
      , mumbai
      Reviewed on Apr 22, 2019
    • LIC Housing Home Loan
      "Should be transparent and prompt"
      0.5 1.0/5 "Really Bad"
      I have housing loan from LIC, the interest is high. My property located in lucknow but I am staying in mumbai hence for the balance transfer its very difficult they need lots of loan documents. Without proper notification they increased the interest but for the reduction they have lots of procedure and I need to pay Rs.1000.
      Was this review helpful? 1
      , mumbai
      Reviewed on Apr 22, 2019
    • LIC Housing Home Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      LIC HOUSING FINANCE has also offered me a home loan. The process was quick and I got the loan on time. The rate of interest is and there were processing charges as well both are very nominal compare to others in the market . The tenure period is 10 year and it is sufficient .
      Was this review helpful? 0
      , vadodara
      Reviewed on Apr 21, 2019
    • review Home Loan
      "Average service"
      0.5 3.0/5 "Satisfactory"
      I have SHAMRAO BANK i have took home loan from this bank . Their service is better, Overall the whole loan process was easy and hassle free. Only the rate of interest were high with this bank. The processing fee is nominal with this bank . And the loan amount is not satisfactory .
      Was this review helpful? 0
      , pune
      Reviewed on Apr 21, 2019
    • HDFC Limited Home Loan
      "GOOD"
      0.5 5.0/5 "Blown Away!"
      HDFC LIMITED is the bank where i have taken the housing loan the loan amount they have offered was good and satisfactory added on that the documentation process was simple and pretty simple documents. I got the loan within one day, the rate of interest was nominal.
      Was this review helpful? 1
      , bangalore
      Reviewed on Apr 20, 2019
    • DHFL Home Loan
      "Very good service"
      0.5 4.0/5 "Great!"
      I had taken a Home Loan from DHFL LTD a long time back and the loan is still running. The loan amount has been sufficient but the interest rate with them has been quite high, where they had not reduced the interest rate as well. The processing fee and charges which they had made has also been high when compared with the other banks.
      Was this review helpful? 1
      , faridabad
      Reviewed on Apr 20, 2019
    • HDFC Limited Home Loan
      "Interest rate should be reduced"
      0.5 4.0/5 "Great!"
      My housing loan process was simple with HDFC Ltd, they took only 3 working days to verify and sanction the amount, they didn't ask any guarantor for my loan, but I feel the interest is bit higher, I took the amount of Rs. 5 lakhs for the duration of five years.
      Was this review helpful? 1
      , hyderabad
      Reviewed on Apr 20, 2019
    • ICICI Bank Home Loan
      "GOOD"
      0.5 5.0/5 "Blown Away!"
      I have applied or the housing loan with the ICICI BANK the documentation process was simple and easy to get the loan they have given the 95% of value as a loan amount. The duration for repaying the loan is for 20 years and using from last 2 years. The rate of interest was 8.6% which was nominal.
      Was this review helpful? 2
      , pune
      Reviewed on Apr 19, 2019
    • LIC Housing Home Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I took my housing loan with LIC HOUSING FINANCE previously, They gave me sufficient loan amount based on the requirement, but i felt they have charged me high rate of interest and even they have charged me processing fee high, so i have done balance transfer to other bank.
      Was this review helpful? 2
      , hyderabad
      Reviewed on Apr 19, 2019
    • Bajaj Finserv Home Loan
      "Average service"
      0.5 3.0/5 "Satisfactory"
      I did balance transfer from one bank to Bajaj finserv for housing loan, the loan amount was sufficient, but rate of interest i felt was less compare to other bank loan, the rate of interest they have charged me up to 8.85% which was nominal, everything is good but i did not like one thing ,like after doing balance transfer i came to know that it is mandatory to pay insurance for premium it use to get lock after paying insurance, i can not do in future balance transfer .
      Was this review helpful? 2
      , hyderabad
      Reviewed on Apr 19, 2019
    • Indiabulls Home Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I hold my housing loan with Indiabulls for an while. They have given me loan on time without any delay, their service was good. The process in getting loan was simple, i got loan on time. Their rate of interest was nominal, still this loan is running.
      Was this review helpful? 2
      , new delhi
      Reviewed on Apr 19, 2019
    • HDFC Limited Home Loan
      "Very good"
      0.5 4.0/5 "Great!"
      Last 4month back I took one home loan from HDFC Limited , but I am not satisfied with their rate of interest since it is little high , and loan amount is 30L I am satisfied with loan amount and and EMI amount is 25K and tenure is 25years , but their customer service is not much good ,and response not at a time.
      Was this review helpful? 1
      , chennai
      Reviewed on Apr 19, 2019
    • HDFC Limited Home Loan
      "Best service"
      0.5 4.5/5 "Excellent!"
      I hold my housing loan with HDFC LIMITED for an while, their service is good, but not sure about the rate of interest like every 2-3 months they are increasing my limit up to 0.05% i need to check with the customer care regarding this, the loan amount was sufficient, they have not charged me processing fee.
      Was this review helpful? 1
      , bangalore
      Reviewed on Apr 19, 2019
    • IIFL Home Loan
      "NOT SATISFIED"
      0.5 1.0/5 "Really Bad"
      I have previously used the housing loan with the INDIA INFOLINE HOUSING FINANCE LTD and transferred to another bank because the rate of interest was higher. They have offered the pre approved so taken. There are hidden charges applicable also it is floating rate of interest with this bank which was 32% which am not happy.
      Was this review helpful? 1
      , mumbai
      Reviewed on Apr 19, 2019
    • HDFC Limited Home Loan
      "GOOD"
      0.5 4.0/5 "Great!"
      The documentation process was easy and simple with the HDFC LIMITED and housing loan was taken before few days. The rate of interest was lesser so transfered the loan with this bank. The duration is for 30 years to repay the loan. There is a pre closure option with this loan.
      Was this review helpful? 2
      , mumbai
      Reviewed on Apr 19, 2019
    • HDFC Limited Home Loan
      "Very good"
      0.5 4.0/5 "Great!"
      I am satisfied with loan amount of 8L with the rate of interest is 8.65% , EMI amount is 6769 rupees and tenure is 20years. It was taken last two years back from HDFC LIMITED and their overall service is good but I would like close this loan after 3 to 4 months.
      Was this review helpful? 2
      , new delhi
      Reviewed on Apr 17, 2019
    • Bank Bazaar Home Loan
      "balance transfer"
      0.5 4.0/5 "Great!"
      i like your offer...t is the first time experience with the Bankbazaar.com and i have a good experience with this channel. I prefer using it through the mobile application as the application is simple and user friendly to access. The customer service is good.
      Was this review helpful? 1
      , mumbai
      Reviewed on Apr 17, 2019
    • Axis Bank Home Loan
      "Process is good"
      0.5 5.0/5 "Blown Away!"
      My home loan is with Axis Bank and the process to get the loan is good. The disbursement happened on time and the customer support and response is good. The documentation was also a smooth process. The rate of interest and processing charges is normal.
      Was this review helpful? 1
      , chennai
      Reviewed on Apr 17, 2019
    • IDBI Home Loan
      "Average service"
      0.5 3.0/5 "Satisfactory"
      I took housing loan with IDBI bank for an while, the loan amount which they have given me was good, it was sufficient based on my requirement, the rate of interest and their processing fee which they have charged me was nominal, AS it is government bank their service is not that up to the mark, but the interest rate was less so i applied.
      Was this review helpful? 1
      , mumbai
      Reviewed on Apr 17, 2019
    • LIC Housing Home Loan
      "Interest rate should be reduced"
      0.5 4.0/5 "Great!"
      LIC housing is good but interest is the concern, I took the amount Rs. 20 lakhs for 20 years. They quoted 10.8% its a floating one, they didn't revise the interest as per the RBI guideline. But they do have balance transfer, part payment and other options.
      Was this review helpful? 1
      , chennai
      Reviewed on Apr 17, 2019
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