What is Reverse Mortgage in India?

What is Reverse Mortgage in India?

Reverse Mortgage is a new concept in India and not much popular. However, in the developed countries of the world, it is a well-known concept. Let me tell you in layman’s language that what is reverse mortgage and how it works?

Well, suppose your age is above 60 years. And you have no family. And the medical costs and other expenses are rising day by day and your income from pension plans and your savings is not enough to meet the end. Well, in that case you go for reverse mortgage. In Reverse mortgage, you go with a bank and give your home to your bank and it will give you every month maximum up to Rs.50,000 up to maximum 20 years.

So the advantage of the reverse mortgage is that, as long as you live, you can live in your same home and after your death, your bank will sell your home and give the surplus money to your nominees.

In this way, you can live in your own home without selling it as long as you live. You have emotional attachment with your home so no need to sell it as long as you live.

This is the main advantage of reverse mortgage. Many major Indian banks are giving you this facility and that’s why you can go for it.

The only criteria is that, your age should be above 60 years and you should be the owner of your home.

However, if you have family than reverse mortgage may not be the good option for you because according to my opinion, you should pass on your wealth to your offsprings.