This year banks have introduced reverse mortgage scheme for senior citizen to help them get loan against their houses so that they do not face any financial crush in their need of time.
As per the data available only 2,000 senior citizens across the country have taken loan against their houses under the reverse mortgage scheme. Amongst the 18 banks and two housing finance companies are offering the scheme, State Bank of India alone has given a majority of the 1,900 loans.
The National Housing Bank (NHB), which developed the scheme for the people aged above 55 years, think that the poor show is because of lack of awareness among senior citizens, whose number stands at 76 million as per the records of 2001 census data, and lack of enthusiasm on the part of the banks.
Therefore NHB has decided to sign agreements with NGOs and corporate foundations to bring the awareness about the unique mortgage program under which a senior couple can continue to live in the house while getting the market value of the house minus ten per cent. Following this NHB on Tuesday signed an agreement of cooperation with Anil Dhirubhai Ambani Group’s social outfit, Harmony, to work with the bank to make the program successful.
S Sridhar, chairman and managing director, NHB said, “The bank is also nudging insurance firms to start an insurance package for people who have outlived the 20-year coverage under the reverse mortgage scheme”.
“The scheme does not compel anyone to part with their house,” Sridhar adds. In case the senior couple decides to repay the loan amount then they will get the house back. Even heirs can do that. He said they can resell the property and profit later.
Once a couple go for this option, they can either take the entire money for their house in installments or will be eligible to get a lump sum up to a total of Rs 15 lakh. Sridhar said but, this can be given only on medical grounds. In the meantime, the couple will be able to continue to reside in the house.
He informed that the maximum installment can go up to Rs 50,000 a month and the valuation of the property will be done by the beneficiary himself.
Bankers, who were busy with queries from senior citizen at forums, said that if the property is in the name of the wife and she dies early, the husband can continue to live there till he dies.
He said that the eligibility for availing the scheme is 55 for women and 60 for men. State Bank of India General Manager Sharad Sharma says, “The depreciation in the value of the property is a risk against which the banks have no cover.”
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Scope for the senior citizens are rather limited I would think. But some of them may yet be productive for the society and industrial needs and some arrangements therefore should be made so that following their Grant applications they can get some help in establishing their own ways. I have not known many people who got help likewise so what do the banks think of the situation I just said.
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