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Business 107 views Sep 19, 2018
Pensioners In Pune: Meet Your Expenses Through Mortgage Loan

Pune is a great city to live in. The city is known for its rich Maratha culture, and the temples and forts in and around the city are a testament to its great heritage. Pune is also quickly becoming India’s newest technological hub. Overall, it is a wonderful place to live whether starting your career or retired.

In this piece, let’s find out how pensioners can benefit from a loan against property in Pune.

The Ideal Way to Supplement Income

Retirement is considered to be a second childhood. You get to explore many different activities that you could not do during your busy work life. A number of retired people take up various hobbies such as painting, travelling, gardening or writing books. However, there is one disadvantage of retirement: it can be expensive. Your pension can help cover costs, but sometimes, it may not be enough. In such cases, it can be necessary to find an additional source of regular income. This is where a loan against property for pensioners can come in handy. The Loan Against Property Interest Rates are quite low in comparison to other loans available.

Why a Reverse Mortgage Loan is Ideal for Pensioners

A reverse mortgage loan offers a steady stream of income to cover various expenses of senior citizens. Here’s how it works: people who are above the age of 60 can mortgage their self-occupied homes with banks and Non-Banking Finance Companies (NBFCs) in return for a loan. This way, the borrower not only gets to live in his own house, he also receives an additional source of income through the loan.

Purpose of the Loan

Senior citizens can use the loan for a wide range of different purposes. This includes:

  1. Supplementing pension or other income
  2. Meeting medical expenses
  3. Home maintenance purposes
  4. Renovating or extending the residential property

Eligibility Criteria for Reverse Mortgage Loan

A few essential criteria must be followed to avail a reverse mortgage loan. The list includes:

  1. The person should be a citizen of India
  2. The person should be above 60 years of age
  3. Married couples are eligible as joint borrowers on the loan if at least one of them is above the age of 60 and the other is not below 55 years
  4. The person should be the owner of a self-occupied residential property that is located in Pune
  5. The property should be free from any encumbrances

Disbursement Process of the Loan

There are generally two modes of disbursement of the loan: periodic payments and lump-sum payments. In the periodic option, the borrower can opt for monthly, quarterly, semi-annually or annual payments based on his/her financial requirements. And in the lump-sum option, the total amount payable is subject to a maximum cap. The actual terms and conditions can differ from one lending company to another.

But regardless of which option you choose, it is important to remember that the loan is applicable only on residential properties. It is important to note here that commercial property is not eligible for a reverse mortgage loan.

Additional Read: A beginner’s guide to availing Loan Against Property in Pune

Conclusion

A reverse mortgage loan is suitable for you if your children are well settled and may not any use of your house. With this option, you can benefit from a regular stream of income to supplement your annual income and meet your financial expenses during the year.