Do you know about reverse mortgage loan offered by the banks?Reverse mortgage loan (RML) was introduced in India in 2007. Only a senior citizen (60 years or above) who owns a residential property can opt for this loan. Factors like age of the applicant, value of the property, current interest rates and the specific plan chosen etc. are considered for calculating the loan amount. Also the residual life of the property should be at least 20 years. It is called reverse mortgage because the lender is making payments to the borrower. The loan amount is disbursed to the borrower in the form of periodic payment. The loan need not be paid back till the home is sold or vacated. The borrower must however pay the property taxes, insurance and other dues.
After the death of the borrower, the legal heir will have the chance to settle the loan along with the interest without having to sell the property.
What are your observations about reverse mortgage loan?