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Reverse Mortgage Comes with Zero End User Restrictions

The main point under reverse mortgage is it remains in the name of the owner until he/she decides to vacate the place permanently. It does not attract any risk of default as long as taxes and insurance amount is paid off.<br><br>Read more at https://www.bajajfinserv.in/what-is-reverse-mortgage

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Reverse Mortgage Comes with Zero End User Restrictions

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  1. Brief Guide About Reverse Mortgage Loan

  2. What is Reverse Mortgage Loan? Reverse mortgage loans were introduced in the Indian financial market in 2007. This credit aims to offer monetary assistance to pensioners, i.e. those older than 60 years if they require financial aid. It provides a secure and steady source of income for them by reverse mortgaging their property. Reverse mortgage loans are an effective solution for individuals who require financial support after their retirement.

  3. How Does a Reverse Mortgage Loan Work? • As against traditional mortgage loans, reverse mortgaged advances provide financing, whereby borrowers are not liable to repay their credit, and even if they do, they are not required to follow any fixed repayment schedule. The repayment of home mortgage loans is decided as per the convenience of a borrower. • Even after reverse mortgaging their property, borrowers hold the rights to reside in it until their death. In case a primary applicant passes away, his/her spouse can remain there till their demise.

  4. How Does a Reverse Mortgage Loan Work? • When an individual applies for this credit, financial institutions assess the market value of the property and then determine the loan amount. Typically, in the case of a reverse mortgage loan, the payable annuity rises with the age of an applicant. • Lastly, after the demise of both the spouses, lenders offer two solutions to their legal heirs. They can either settle the debt to retain ownership of that property or, the lender auctions it to recover their money.

  5. Mortgage Loans v/s Reverse Mortgage Loans • Mortgaged asset : Mortgage loans aid borrowers financially to purchase or construct a property and then repay the amount over a specific period. Once the due amount is repaid, individuals will be entitled to complete ownership of their property. On the other hand, a reverse mortgage loan allows borrowers to avail credit against their existing property, which they own. In this case, individuals are not liable to repay their debt, but they are permitted to use the mortgaged properties as long as they or their spouses are alive.

  6. Repayment : Another fundamental difference between these two financial products is the method of repayment. In case of a traditional mortgage loan, borrowers are required to follow a fixed repayment schedule over a period to repay their debt. However, reverse mortgage benefits retirees who require periodic financial assistance and do not carry such schedules for repayment. Instead, after the borrower’s demise, the property is auctioned for recovery. Also, the heir can choose to repay this amount to regain his/her right to ownership.

  7. Ownership : In case of a mortgage like a loan against property, financial institutions hold the ownership of the mortgaged property until the loan is repaid. However, reverse mortgage loans allow individuals to use the property until their demise. If the primary applicant passes away before his/her spouse, then the spouse has the right to stay on that property until their death.

  8. THANK YOU Check more at https://www.bajajfinserv.in/what-is-reverse-mortgage

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