Citizens opting for a reverse mortgage need to make their agreements foolproof, especially with regard to interest rate changes and tenure. More senior citizens can now live in their homesand earn from that too.The union budget proposes to facilitate reverse mortgages for them. The national Housing Bank will refinance home financing companies which offer this product.

The bank does a valuation of the house and on the basis of that , pays the owner an equated monthly installment (EMI).So, typically, the person or his spouse can continue to live in the house till they pass away after which , the house becomes the property of the bank.

The move will help people who find it difficult to get a personal loan and a home loan. There are agreements that are flexible in nature and where the valuation of the house is done periodically.

"So, the Emi could go down or the number of years of contract may come down if their are any changes in the value. The bottomline is that the value of the house should always exceed the loan amount.
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  • this is very useful

    Wow, this is very useful.. Thanks for sharing this and hoping I could implement it too.
  • Dear friends,

    In Indian context, many parents may not like to do as their children may not inherit the property, though these children may neglect their own parents at their old age, after all there is a proverb in Tamil- PETHTHA MANAM PITHTHU, PILLAI MANAM KALLU- rough translation- PARENTS MINDS ARE VERY SOFT ( KIND TO CHILDREN) AND THE SON/DUGHTER'S MIND IS LIKE A STONE ( HARD TO PARENTS)