Reverse Mortgages - A Clear Perspective

 A reverse mortgage, also called as a lifetime mortgage, is a loan option that was introduced specifically for senior citizens. Reverse mortgage is different from the conventional mortgage. In fact all the methods implemented in it are diametrically opposite to a normal mortgage. In a mortgage you borrow money from a lender at the beginning and then pay it back to them over a period of time with the help of Equated Monthly Installments also known as EMI's. Whereas in reverse mortgage, you mortgage a property you already own, provided the property is still not on any loan, and get a nominal amount for the property's worth for a fixed period of time.

In most cases, the time period offered is 15 years and the owner of the property and his/her spouse continue to live in the house till their death, which is so designed such that this might occur only after the time period of the reverse mortgage. Hence any senior citizen opting for reverse mortgaging will get a reverse EMI from the bank for 15 years. This is also called as annuity payments. After the given period of time, the annuity payments stop but the person can live in the house. This offers flexibility for the person, a senior citizen to go for a loan or mortgage.

The reverse mortgaging option is mostly preferred when the person is independent of any of his siblings, children, grandchildren, etc. According to the reverse mortgage guidelines of many popular banking agencies, private and government, any person above the age of 60 is eligible to opt for reverse mortgaging. And also, the person should have proper identification as the citizen of the country along with age and address proofs. With proper documentation of the property the person wants to pledge, reverse mortgage is the best option available for an elderly person to have a consistent monthly income.