How Does It Work?

Consumer Voice - - Bfsi / Reverse Mortgage Loans -

The for­mal­i­ties of a loan against prop­erty are gone through, in­clud­ing the en­tire process of doc­u­men­ta­tion, val­u­a­tion, and fix­ing rate of in­ter­est and ten­ure of the mort­gage loan. When the home is pledged, its mon­e­tary value is ar­rived at by the bank on the ba­sis of the con­di­tion of the prop­erty, the de­mand for it, and le­gal own­er­ship by means of an ad­vo­cate’s re­port, as well as the val­u­a­tion of the prop­erty through a re­port ob­tained from ap­proved val­uers in the lender’s panel as re­gards mar­ket value, cir­cle rate value and dis­tress sale value. The dis­burse­ments are made to the ben­e­fi­ciary by way of an an­nu­ity that can be a lump-sum amount or paid in reg­u­lar monthly/quar­terly in­ter­vals, af­ter the bank has put aside a mar­gin for in­ter­est costs and price fluc­tu­a­tions. The pe­ri­odic pay­ments are re­ceived by the bor­rower over a fixed loan ten­ure.

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