State Bank of India is launching reverse mortgage loan for the senior citizens from october12 called the "SBI reverse mortgage loan" available to all citizens above 60 years. The loan would be given to spouse provided if he/she is above 58 years, which carries the interest rate of 10.75% p.a which would be reset at the end of every 5 years along with the revaluation of the security and re-adjustment of loan instalments, if necessary. There is no upper limit of the loan, which means the customer could avail loan for any amount.
Reverse Mortgage Loan is a new concept in India, where the customers can avail loan using their homes as collateral security. They can opt lumpsum payment at the beginning or monthly or quarterly payments.
Here the borrowers need not repay the loan and can continue living in the house, during their lifetime. Thereafter, their legal heirs have to repay the loan, or the bank will sell the property and liquidate the loan, and the surplus amount, if any would be repaid back to the heirs.
LIC is also ready with the product and plans to launch it soon, Says SK Mitter, director and chief executive of LIC Housing Finance said,
Reverse Mortgage Loan is a new concept in India, where the customers can avail loan using their homes as collateral security. They can opt lumpsum payment at the beginning or monthly or quarterly payments.
Here the borrowers need not repay the loan and can continue living in the house, during their lifetime. Thereafter, their legal heirs have to repay the loan, or the bank will sell the property and liquidate the loan, and the surplus amount, if any would be repaid back to the heirs.
LIC is also ready with the product and plans to launch it soon, Says SK Mitter, director and chief executive of LIC Housing Finance said,
“Reverse mortgage product is on our agenda. There is a market for reverse mortgage. We are ready with the product as per the guidelines issued by National Housing Bank and will launch it in some time."
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