Reverse Mortgage Loan Scheme: Many people have to face financial challenges in old age. In such a situation, the situation becomes worse when the elderly husband and wife are living alone in their house and there is no other person in their family to take care of them. In such a situation, Reverse Mortgage Loan Scheme can prove to be very useful. Reverse mortgage loan works in exactly the opposite way from a normal home loan, i.e., as a home loan requires the bank or financial institution to pay installments every month, in contrast to the reverse mortgage loan, the financial institution/bank mortgages the house for a fixed amount every month. The amount is given and the loan applicant is also allowed to live in the same house. In this way, in old age, your own house can earn you every month, so that you will not have to face financial challenges.
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Benefits of reverse mortgage loan
- Interest is charged at low rates.
- The processing fee has to be paid less.
- No penalty is to be paid on pre-payment.
- Bank income is tax free. However, this amount will not be considered as deductible on repayment at the end of the loan tenure.
- If any construction work is done in the house from the income received from the bank, then the benefit of deduction is available on that amount.
Special Features of Reverse Mortgage Loan Scheme
- Only Indian citizens will get the benefit of this scheme.
- If a single borrower then the minimum age should be 60 years. If taking the loan jointly, then the age of the spouse should be at least 58 years.
- The loan will be available for a period of 10-15 years according to the age of the borrower.
- Loan can be availed up to a minimum of Rs 3 lakh and a maximum of Rs 1 crore.
- Processing fee- 0.5 percent of the loan amount, minimum Rs 2 thousand and maximum Rs 20 thousand. Tax Extra.
- Post loan sanction fees – Stamp duty on loan agreement and mortgage, property insurance premium and CERSAI registration fee (fees of Rs 50 for a limit of Rs 5 lakh or Rs 100 for a limit of Rs 5 lakh), GST extra) will have to be paid.
- The house should be in good condition and should be fully owned by the loan applicant.
- This loan will not be available on the property for commercial use.
(Source: bankbazaar.com and SBI home loan website)
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