My age is 72 and my wife is 66 years old. I intend to avail reverse mortgage loan on my own home. The title deeds of the home are in my name. Please let me know whether the loan proceeds of reverse mortgage loan can be used to buy a second home.
— Murli Joshi Reversed mortgage loans are extended by scheduled banks and housing finance companies registered with NHB. The reverse mortgage loan is secured by way of equitable mortgage of residential property. For the loan you should be the owner of a selfacquired property with clear title indicating the ownership of the property. The property can be house or a flat and should be in your own occupation. The residential property should be free from any encumbrances and the residual life of the property should be at least equal to the tenure of the loan. You can avail this loan anytime after you turn 60 years of age.
The loan is provided through monthly/quarterly/ half-yearly/annual disbursements or a lump sum or as a committed line of credit or as a combination of the three. The maximum lump sum payment can only be availed up to 50% of the total eligible amount of loan restricted to ₹ 15 lakh. The lumpsum payment can only be used for medical treatment for self, spouse and dependants, if any. So. it will not be possible for you to get a lump sum loan to fund the purchase of another house. Also, you should think hard before deciding to purchase a house after taking a loan at this stage of your life. The maximum tenure of the reverse mortgage loan is 20 years. The amount of loan can undergo revisions based on re-valuation of property at the discretion of the lender. You and your spouse can continue to use the residential property as your primary residence till you are alive.
The scheme is intended to supplement the cash flow of senior citizen after retirement in case their monthly inflow/income is not sufficient to cover their day-to-day expenses.
If any time during the loan tenure if you feel you can prepay the loan, you can exercise this option.
I am 24 years old working in the marine sector and planning to buy land and construct a house on it. My budget is ₹ 30 lakh. What is the minimum initial amount that I need to invest?
— Thomas Fernandes If you are planning to selfconstruct a house on the same plot you can take a composite loan. It will cover the cost of land and construction. The lender normally requires documents for proof of income, identity and residence for any loans. The lender will also insist for documents relating to title of the plot being purchased. You will have to submit an estimate of the total cost of construction, duly certified by an architect/civil engineer. While granting the loan the lender will consider cost - whichever is lower - of the plot or its current market value. You will have to start the construction within a reasonable time after purchase of the plot. The lender will determine eligibility for home loan based on the total cost comprised of construction cost and cost of the plot.
Your own contribution which needs to be paid before bank disburses any amount will have to be minimum 20% of the cost of property including construction. Moreover, as per the guidelines of RBI, the bank will not take into account stamp duty and registration costs while calculating the cost of the property. Therefore, in addition to 20% you will also have to fully fund the cost of stamp duty and registration charges.