In a normal mortgage bank lend money or sanction loan against security or Mortgage and borrower pay EMI to the bank and pay their loan amount and the interest part.
But in the reverse mortgage system bank will pay EMI to the customer against the Mortgage. Here Customer would receive a fixed amount over a period of their life and at the end of their life (i.e. after death) of the customer; bank will takeover the property or mortgage of the customer. This facility is only available to the Senior Citizen. In this case relatives of the Senior Citizen can pay the full amount paid by the Bank to the Senior citizen and release the property from the bank custody.
This concept is very popular in western country. But in India also few banks are coming with such type of concept
Comment:
It is very difficult to comment on the success of this concept, in India we prefer to stay in joint family and we make agreement of transfer of property to our relative before death.
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5 comments:
Personal opinion: dont think it will be successful in country like India.
Personal opinion: I dont think it will be successful in India.
I think its a beautiful concept.
In India most of the senior citizens have pension system, which as we all know, is not enough to satisfy their basic requirements.
Therefore introducing this concept in India would be a brilliant concept
In times to come(and that too not far away), this concept will gain popularity. As our society gets more and more westernized,the trend of Nuclear Family system is really picking up and the concept of Joint Family system is getting theoretical. And given the fact that real estate investment is one of the most rewarding options around, we may see more and more middle age people owning estates. So one day you may find yourself sipping a hot cuppa tea with your wife, reading the newspaper, sitting in the lawn of a large bungalow which you have reverse mortgaged with a bank.
Pathetic Concept......
people in india have attachment to their homes. even once they die, there kids wont sell off as they have some sort of attachment towards there home.
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