The Most Authentic Guide on Personal Finance and Investments


Massive changes in Mutual Fund Schemes post categorization and rationalization.
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Reverse Mortgage - The Operational Parameters

Earlier, in my blog 'Reverse Mortgage makes Senior Citizens Self-reliant', I had given a broad outline of what a Reverse Mortgage Scheme is.

Let us now look at the key operational parameters of the same.

Eligibility
>  To be eligible you should be at least 60 years of age and your spouse not less than 55
>  The property you own should be residential
>  It should have clear title and be free from all encumbrances
>  It should have at least 20 years of residual life
>  It should be your permanent primary residence

Loan Amount
>  The total loan amount would be around 60-80% of the value of your property
>  The property would be revalued at least once every five years and the loan amount adjusted accordingly.

Loan drawdown
You can take the money in 
> instalments (monthly/quarterly/half-yearly/annually with monthly cap of Rs.50,000) or 
> lump sum (up to 50% of the total eligibility for medical expenses with max Rs.15 lakhs) or 
> as a line of credit or 
> a mix of all three

End-use
>  You can use the money for day-to-day living, renovations, medical needs, etc. but not for speculation, trading or business

Interest rate
>  As per the prevailing market rates and could be fixed or floating 

Loan closure
> When the last surviving borrower dies or 
> The property is proposed to be sold or
> The house is no longer the permanent primary residence

Prepayment  
>  One can prepay the loan at any time
>  Normally there is no prepayment penalty

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