Reverse mortgage scheme extended till life of borrower: With an aim to make the reverse mortgage facility more attractive for senior citizens, the government has extended period of the scheme from 20 years to the life of the person seeking funds from banks by pledging his residential property.
This has been done by amending the Reverse Mortgage Scheme, 2008 which enables a person above the age of 60 years to avail of periodical payments from a lender against the mortgage of his/her house while remaining the owner and occupying the house.
But, now period has been extended to “the residual life time of the borrower,” said a notification by the Central Board of Direct Taxes (CBDT).
Persons availing the facility gets certain income-tax benefits.
The scheme is operated by National Housing Board and other housing finance companies registered with it and banks.
As per the amendment, Life Insurance Corporation of India ( LIC) and other insurer registered with theInsurance Regulatory and Development Authority ( IRDA) have included as annuity sourcing institutions.
As per the scheme, on the borrower’s death or on the borrower leaving the house property permanently, the loan is repaid along with accumulated interest, through sale of the house property.
The borrower or heir can also repay the loan with accumulated interest and have the mortgage released without resorting to sale of the property.
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