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

    • LIC Housing Home Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have taken holding my housing loan with LIC housing finance long back, they had given me good sufficient loan amount as per my requirement, the rate of interest they have charged me was nominal, so far i did not face any issue, i closed the loan amount my additional charges got waived off.
      Was this review helpful? 0
      , jaipur
      Reviewed on May 25, 2019
    • Axis Bank Home Loan
      "Good Service"
      0.5 4.0/5 "Great!"
      I have taken Home Loan directly through Bank.The loan amount was 33.25 lakhs for the tenure of 20yesrs ,This loan still is active ,The rate of interest and processing fee was nominal ,The agent gave all the information about the loan process clearly ,The loan got sanctioned on time ,the loan amount was sufficient.
      Was this review helpful? 0
      , chennai
      Reviewed on May 25, 2019
    • LIC Housing Home Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I have taken a home loan in LIC HOUSING FINANCE for more than 1 year. As per my requirement I received a loan amount for the duration of 20 years. The rate of interest is nominal and the processing fee is applicable. On time the loan got sanctioned from the bank.
      Was this review helpful? 0
      , hyderabad
      Reviewed on May 25, 2019
    • Allahabad Bank Home Loan
      "Customer friendly with low interest charges & great service"
      0.5 5.0/5 "Blown Away!"
      I have home loan with Allahabad bank, the process was customer friendly. They sanctioned the loan amount within 10 days, the rate of interest is nominal as compared to other banks. I took the loan amount of Rs.25 lakhs for the duration of 15 years.
      Was this review helpful? 0
      , vadodara
      Reviewed on May 25, 2019
    • LIC Housing Home Loan
      "Good loan services"
      0.5 2.0/5 "Expected more"
      LIC home loan service is not so good. The interest rate is low in LIC. They have sanctioned the loan very late. They have broker to sanctioned the loan and the LIC employee don't deal with the customers directly. The brokers will get money from the customer. If the customer applies the loan directly, the LIC people will reject the loan.
      Was this review helpful? 0
      , hyderabad
      Reviewed on May 24, 2019
    • review Home Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have taken my housing loan with Bajaj finance limited , the loan amount which they have given to me was sufficient , it was as per my requirement, they have help me out when it was on emergency case, they ask for the documents and quick they sanction my loan, the rate of interest i had some confusion, like every time they use to increase interest , now it is 11.5% which is nominal,i has been 5-6 months only i have taken this loan.
      Was this review helpful? 0
      , pune
      Reviewed on May 23, 2019
    • HDFC Limited Home Loan
      "Easy processing loan"
      0.5 5.0/5 "Blown Away!"
      I have bought home loan in HDFC Ltd since i know the people working over there, i have chosen this bank. There is a very quick loan process. I applied the loan amount of Rs. 62 lakhs which is a joint home loan and they have sanctioned the same. The processing fee and the interest rates are nominal. I used to pay the EMI through auto deduction.
      Was this review helpful? 0
      , hyderabad
      Reviewed on May 23, 2019
    • Canara Bank Home Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I had applied for a home loan with CANARA BANK and to get my application processed it has not took a long time. There was no delay. The interest rates moderate because they keep on changing the rates . Customer service is very good they are very professional .
      Was this review helpful? 1
      , ghaziabad
      Reviewed on May 22, 2019
    • HDFC Limited Home Loan
      "Good home loan service"
      0.5 5.0/5 "Blown Away!"
      Taken my home loan from HDFC ltd. Bought my loan 10 years back. I had a salary account with them, hence i have selected this bank. I have bought the loan amount of Rs. 5.50 lakhs. I am paying the EMI amount of Rs. 6800. I have selected the tenure period of 20 years. I have paid the processing fee of Rs. 6000.
      Was this review helpful? 0
      , vadodara
      Reviewed on May 22, 2019
    • HDFC Limited Home Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I have taken Home loan through HDFC LTD which i have directly applied with bank The .rate of interest and the processing fee was nominal .I have applied for the loan amount of 25lakhs for the tenure of 12years ,still loan is active ,The agent gave all the information about the loan process .
      Was this review helpful? 1
      , bangalore
      Reviewed on May 21, 2019
    • HDFC Limited Home Loan
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I have taken a home loan in HDFC LTD. The process was done on smooth and received a loan amount 12 lakhs for the duration of 10years. The rate of interest and processing fee is nominal in this bank.The good which I would like to share is documentation process was done on easy.
      Was this review helpful? 1
      , chennai
      Reviewed on May 21, 2019
    • review Home Loan
      "Average Service"
      0.5 3.0/5 "Satisfactory"
      I had taken my Home loan from GIC HOUSING FINANCE LTD and the process in getting the loan was pretty much simple where it just took two weeks for the disbursement of the loan amount. The interest rate with them is also pretty good but after getting loan the response from their end has not been that good. They don't have a mobile application or a website to do things online.
      Was this review helpful? 0
      , hyderabad
      Reviewed on May 21, 2019
    • HDFC Limited Home Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I have taken a home loan in HDFC bank for more than a year. As per my expectation I received a loan amount for the duration of 15 years. The customer service is good and support on time. The rate of interest is good and low when compare to other bank. The fee also applicable and nominal.
      Was this review helpful? 0
      , indore
      Reviewed on May 21, 2019
    • review Home Loan
      "Need to decrease charges"
      0.5 3.0/5 "Satisfactory"
      I am using the home loan with GIC HOUSING FINANCE LTD since from last last year, as per my expectation I received a loan amount for the duration of 24 years. The rate of interest is high when compare to other.The fee is nominal. On time I received a loan amount.
      Was this review helpful? 0
      , new delhi
      Reviewed on May 20, 2019
    • ASPIRE HOME FINANCE CORPORATION LIMITED Home Loan
      "Best Service"
      0.5 2.0/5 "Expected more"
      I have taken Home loan through Aspire Home Finance corportation Limited .I have applied for the loan amount of 4 lakh for the tenure of 10years ,The rate of interest and processing fee was high ,loan amount got sanctioned on time it was sufficient,The agent gave all the relevant details and also submitted documents on time .
      Was this review helpful? 0
      , thane
      Reviewed on May 20, 2019
    • HDFC Limited Home Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I have taken Home loan through HDFC Ltd through Online .The service is good so far i have taken the loan amount of 50lakhs for the tenure is 30yearrs ,still the loan is active ,The rate of interest and processing fee was nominal ,I have submitted documents and the agent gave all information about the loan process .The agent was good ,loan amount got on time,it was sufficient as welll.
      Was this review helpful? 0
      , hyderabad
      Reviewed on May 20, 2019
    • LIC Housing Home Loan
      "Percentage should be reduced"
      0.5 3.0/5 "Satisfactory"
      I have housing loan from LIC, as per my experience the interest rate is huge as compared to others. In 2014 I took the loan amount around Rs 30 lakhs, the agent came to my place and completed the documentation process, it would be if they reduce the interest.
      Was this review helpful? 0
      , lucknow
      Reviewed on May 20, 2019
    • DHFL Home Loan
      "Interest rate should be reduced"
      0.5 3.0/5 "Satisfactory"
      Taken my housing loan from DHFL. So far i never had a chance to speak with their call centre people. When i had sanctioned my loan the interest was 10.35% which is a floating interest rate. They have charged me some processing fee. Total tenure period of the loan is 20 years. Within a month, they have sanctioned the loan. Initially, sanctioned the loan was a quick enough but disbursing the amount is took some time. The loan is easy to get sanctioned.
      Was this review helpful? 0
      , thane
      Reviewed on May 20, 2019
    • HDFC Limited Home Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been taken my housing loan with HDFC LIMITED a while ago, the loan amount which they have given to me was sufficient, the rate of interest they have charged me was sufficient, the processing fee they have charged me up to 8000 which was minimal, still this loan is running, so far i did not face any issue.
      Was this review helpful? 0
      , gurgaon
      Reviewed on May 20, 2019
    • SBI Home Loan
      "Good"
      0.5 5.0/5 "Blown Away!"
      I have taken a home loan in SBI bank for more than a year. As per my expectation I received a loan amount for the duration of 15 years. The rate of interest was nominal. Only the drawback which I felt was need to visit often to office for further process.
      Was this review helpful? 1
      , coimbatore
      Reviewed on May 20, 2019
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