GYAN KI BAAT
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PLAYLIST : PERSONAL FINANCE ON YOU TUBE CHANNEL
SHASHI AGGARWAL
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INTRODUCTION
1. THE REVERSE
MORTGAGE LOAN WAS INTRODUCED ON 2007 TO IMPROVE THE LIFE OF HOUSE OWNING SENIOR
CITIZEN
2. RML IS A LOAN
THAT ENABLES THEM TO MEET THEIR DAY TO DAY EXPENSES PERTAINING TO FOOD, MEDICINE
AND REPAIR OF THE HOUSE.
3. MINIMUM AGE
OF AVAILING THE RML IS 60 YEARS IRRESPECTIVE OF THE GENDER DIFFERENCE
4. IF A COUPLE
SEEKS JOINT LOAN THE AGE LIMIT FOR THE SPOUSE IS 55 YEARS OR ABOVE
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FEATURES
1. AVAILABLE
ONLY TO HOME MAKERS AGED 60 YEARS OR ABOVE
2. THE AMOUNT
RECEIVED IS NON TAXABLE
3. THE MAXIMUM
LOAN AMOUNT IS CAPPED AT RS ONE CRORE
4. THE TENOR
VARIES FROM 10 TO 20 YEARS
5. APPLICANT CAN
CHOOSE THE INSTALMENT FREQUENTLY AND ALSO OPT FOR OCCASIONAL LUMP SUM PAYMENT
IN EMERGENCY SUCH AS MEDICAL EXIGENCY
6. PAYMENT MAY
BE INCREASED IN BETWEEN THE TENURE AS A RESULT OF APPRECIATION IN ORIGINAL
PROPERTY VALUE
7. THE OWNER CAN
CONTINUE TO STAY TILL THEIR LAST BREATH OR UN TILL THEY DECIDE TO MOVE OUT
PERMANENTLY.
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OBJECTIVES OF REVERSE MORTGAGE
1. TRADITIONAL
JOINT FAMILIES HAVE GIVEN WAY TO NUCLEAR ONE
2. COMMON TO SEE
CHILDREN SETTLED ELSEWHERE WHILE THERE ELDERS PARENTS CHOSE TO HOLD ON TO THEIR
ROOTS.
3. LONELINESS IS
INCREASING AMONG SENIOR CITIZEN AND MANY OF THEM OFTEN END UP FACING CRISIS
OWNING TO A LACK OF PROPER FINANCIAL RETIREMENT SUPPORT
4. KEEPING IN
MIND, SENIOR CITIZEN WHO ARE HOME MAKERS BUT DO DON’T HAVE ANY OTHER SOURCE OF
INCOME.THE GOVT INTRODUCED THE SYSTEM OF REVERSE MORTGAGE.
5. DUE TO
ADVANCEMENT IN MEDICAL SCIENCE LIFE EXPECTANCY IN INDIA HAS INCREASED
SUBSTANTIALLY
6. ACCORDING TO
MINISTRY OF SOCIAL JUSTICE AND EMPOWERMENT,THE NUMBER OF SENIOR CITIZEN IN INDIA
( ABOVE 60 YEARS ) IS PROJECTED TO RISE TO 14.3 CRORE IN 2021 AND 17.3 CRORE IN
2026.
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REVERSE MORTGAGE
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TWO TYPES OF RML
1. REGULAR RML:
A HOME OWNER ABOVE 60 YEARS OF AGE IS ELIGIBLE FOR REVERSE MORTGAGE. ALLOW HIM
TO TURN THE EQUITY IN HIS HOME INTO LUMP SUM OR PERIODIC PAYMENTS
2. REVERSE
MORTGAGE LOAN ENABLED ANNUITY( RMLeL):
- PURCHASE THE
ANNUITY PLAN AND PAYS OUT THE PRINCIPAL AMOUNT TO THE INSURANCE COMPANY.
- BANK BECOMES
THE MASTER POLICY HOLDER AND THE BORROWER ANNUITANT
- THE INSURANCE
COMPANY SCHEDULES THE REPAYMENT PLAN AND SET THE ANNUITY BENEFITS THAT
WILL BE PAID AT REGULAR INTERVAL TO THE ANNUITANTS.
- THE INSURANCE
COMPANY RETURNS THE BONUS IN CASE ROI FROM INVESTMENT OF PURCHASE PRICE IS
OVER 6% PERCENT
- ELIGIBILITY
1. THE APPLICANT
MUST HAVE HIS /HER OWNED PURCHASED HOUSE AS RML CANNOT BE SECURED AGAINST
ANCESTOR’S PROPERTY
2. BANKS AND
FINANCIAL INSTITUTION ASSESS THE VALUE OF THE PROPERTY BUT MINIMUM RESIDENTIAL
LIFE SHOULD NOT BE LESS THAN 20 YEARS
3. PRESENTLY RS
50,000 IS THE CEILING LIMIT IN MONTHLY PAYMENT PLAN AND 50% OF THE LOAN AMOUNT
IS THE MAXIMUM LUMP SUM LIMIT
4. RML CAN BE
RAISED BY UPTO 90% OF THE PROPERTY AND GENERALLY LOAN IS GRANTED FOR 50% TO 60%
OF THE PROPERTY VALUE
5. THE BORROWER
SHOULD BE THE OWNER AND SELF OCCUPYING
THE MORTGAGED PROPERTY AS PRIMARY RESIDENCE
6. VACANT HOMES
AND INVESTOR PROPERTIES ARE NOT ELIGIBLE
7. ACTIVITIES
LIKE HOUSE REPAIRING,PAYMENT OF TAX AND INSURANCE ARE THE SOLE RESPONSIBILITIES
OF THE APPLICANT
8. REGULAR
CHARGES AND DOCUMENTATION FEE AND PROCESSING FEE WOULD BE DEDUCTED
9. RBI HAS FIXED
A MINIMUM LIMIT OF 3 LACS AND MAXIMUM LIMIT OF ONE CRORE FOR THIS PRODUCT
10. FIVE YEARS
THE LENDER WILL APPRAISE THE PROPERTY AND CAN REASSESS THE REPAYMENT AMOUNT
ACCORDING TO THE PRESENT MARKET VALUE
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FACTORS
1. BORROWER’S
AGE
2. PROPERTY
VALUE
3. PREVALENT
INTEREST RATES
4. CHOSEN PLAN
5. OLDER THE
BORROWER ,HIGHER THE AMOUNT IS AVAILABLE
6. THE TENURE OF
RML RANGES FROM 10-20 YEARS
7. ACCORDING TO
NATIONAL HOSUING BANK SCHEME THE MAXIMUM TENURE OF THE LOAN IS 15 YEARS
8. WHEN THE
BORROWER LIVES LONGER THAN 15 YEARS ,PERIODIC PAYMENTS WILL NOT BE MADE BY THE
LENDER BUT THE BORROWER CAN CONTINUE TO OCCUPY THE PROPERTY
9. REVERSE
MORTGAGE LOAN
10. THE LOAN DOES
NOT BECOME PAYABLE DURING THE STIPULATED TENURE UNLESS THE APPLICANT DIES OR
CHOSE TO SELL THE HOUSE OR MOVES INTO ANOTHER PROPERTY
11. IN CASE THE
PROPERTY OWNER DIES THE LEGAL HEIRS CAN CHOOSE TO REPAY THE LOAN AND CLAIM THE
PROPERTY
12. IN CASE, SALE
OF THE PROPERTY EARNS MORE THAN THE LOAN AMOUNT, THE EXCESS IS HANDED OVER TO
LEGAL HEIR. A TAX ON CAPITAL GAIN IS APPLICABLE
13. BUT IF THE
PROPERTY IS SOLD AT LOW VALUE THEN BANK WILL BEAR THE LOSS
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CHALLENGES
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IT IS UNPOPULAR
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REASONS:-
1. INDIANS TEND
TO TREAT OWNED PROPERTY AS AN IMPORTANT FAMILY ASSETS
2. INTENDED TO
BE INHERITED BY THE NEXT GENERATION AND WOULD BE LIQUIDATED AS LAST RESORT
3. ELDERLY TEND
TO HOLD A PLACE OF HIGH SIGNIFICANCE IN THE INDIAN CULTURE
4. PROPERTY
OWNING SENIOR CITIZEN ARE USUALLY ASSURED OF CARE AND SUPPORT IN THEIR SUNSET
DAYS
5. TRADITIONAL
MINDSET OF THE PEOPLE
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NOT FULLY UNDERSTOOD BY THE CUSTOMERS
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COMPLEX PRODUCT
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LOW AWARENESS
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CONCLUSION
1. WITH DUE
DILIGENCE ,THE BENEFITS OF A REVERSE MORTGAGE LOAN WILL OUTWEIGH THE RISK
INVOLVED
2. UNIQUE
PRODUCT
3. PROVIDES
FINANCIAL FREEDOM TO SENIOR CITIZEN
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