How A Reverse Mortgage Works And Eligibility For Qualify It?
Finance 201

How A Reverse Mortgage Works And Eligibility For Qualify It?

How A Reverse Mortgage Works And Eligibility For Qualify It?

A reverse mortgage loan is a type of advance customised for senior citizens. Individuals can keep their pre-occupied property as collateral while availing such credits. The reverse mortgage loan amount depends on the market value of your property, and the amount can be paid to the borrower throughout the tenor in proportions or at the end of the tenor. Also, after the property is no longer occupied, borrowers have 6 months to pay the availed amount or can also choose to repay the debt at once by selling off the property.

As mentioned, your credit amount availed depends on the market value of your mortgaged property (loan-to-value ratio) if you are applying for a reverse mortgage loan. You do not repay your loan amount in equated monthly instalments as you would in the case of traditional loans.

Factors Affects Reverse Mortgage:

Similar to the way how a loan against property is processed, the payments for reverse mortgage loans are made in proportions depending on your needs, such as –

  • Monthly: You will be disbursed a pre-decided amount in proportions monthly until the loan amount is used up.
  • Lump sum: You can avail the entire loan amount at once if required.
  • At the time of need: You can avail the required amount at any time depending on your financial need throughout the loan tenor.

Individuals can also opt for a combination of the above-mentioned payment methods while applying for a reverse mortgage loan based on their requirements.

Factors On Which The Loan Amount Depends

The loan amount that you avail against your mortgage depends on the following factors.

  • Age of the applicant.
  • Government laws on lending limits.
  • Market value of your mortgaged property.
  • Current interest rate of the reverse mortgage loan in India.

Repayment Method

Applicants do not have to pay the borrowed amount in monthly instalments. You can repay your amount by selling off your property after the tenor of your reverse mortgage loan ends. Also, the repayment amount will depend on the current market value of your property at that time.

Interest Rates

Applicants should opt for such credits with a lower interest rate. Such a low-interest rate will ensure that the total cost of your loan reduces. This would also confirm that the debt accumulated is less and does not strain your budget. Also, check the other applicable fees and charges. Besides, inquire your lender about any hidden costs involved before you avail such loans. 

Eligibility Criteria

The eligibility criteria for such reverse mortgage India loans are –

  • Age: Applicants should be above the age of 60 years.
  • Residence: The property should be your permanent residence and should be above 20 years old.

Besides, your property should be free from any liabilities and legal issues.

If you are below the age of 60 years but require a secured loan, you can opt for other financial products offered by various financial institutions and NBFCs. Bajaj Finserv is one such NBFC that provides Loan Against Property at competitive interest rates against minimal documents. Other benefits they offer with such loans include –

  • Online account access.
  • Prolonged tenor ranging anywhere between 2 and 20 years.
  • Substantial loan amount up to Rs. 3.5 Crore.
  • Instant approval.
  • Balance transfer facilities.
  • Minimal pre-payment and foreclosure charges.

This NBFC also brings you pre-approved offers to make the application process fast and hassle-free. These pre-approved offers are available on multiple financial products, including home loans, personal loans, business loans, etc.

Additional Read: How is Reverse Mortgage a Boon for Senior Citizens?


The application process for such loans is convenient, and you can do so online. To apply, head over to your lender’s official website and fill out an application form with your personal and financial details. After your application is approved a representative of your lender will visit you to collect the required documents.

The standard documents that you have to furnish are Aadhaar card, PAN card, utility bills, income proofs, etc. Once your documents are verified, the loan amount will be disbursed within 24 hours. Before you apply for such loans, do make sure to check the fees and charges for a loan against property and choose your lender accordingly.

Apart from the above, the funds of your reverse mortgage scheme are completely tax-free and come with no end-usage restrictions. Borrowers can use the amount to cater to various personal needs such as medical emergencies, fund a wedding or education of their children, renovate their home, etc.

You must be logged in to post a comment Login

Leave a Reply

Finance 201

Hii, I am a blogger and writer too. I also loves to reading novels and cooking food in my free time.