INDIA: This bank offers a ' handholding' reverse mortgage

BANGALORE (Mangalorean.com), April 22, 2008: Vijaya Bank, the Bangalore-based public sector Bank, today launched its Reverse Mortgage Loan scheme for citizens aged over 60 years owning a self-acquired and self-occupied residence. The loan is also available to married couple jointly, subject to one of the spouses being above 60 years of age. The scheme is a handholding facility, which seeks to help the senior citizens to derive a regular stream of cash flow to support themselves in their old age. It is suited to meet the cash requirements of the senior citizens for variety of purposes and provides regular monthly cash flow support towards supplementing their other income or to meet their regular expenses on livelihood. The borrower also has the option of availing a part of the loan as lumpsum component. However the same is capped at 30% of the discounted value of the loan amount, towards meeting medical expenses or expenses on other emergencies, or for renovation and improvement of the property or even for take over of the subsisting liability against the property. The minimum amount of loan under the scheme is Rs.2 lakh whereas the maximum amount is pegged at Rs.100 lakh. The bank has priced the scheme at a highly competitive fixed interest rate of 10.5% which shall be reset once every 5 years. The loan will be available for a minimum tenure of 7 years with a maximum tenure of 15 years. The scheme provides for further extension of the period at the end of the original tenure subject to the then prevailing value of the property and the needs of the surviving borrower. The borrower can foreclose the liability at any time during the tenure of the loan without any charges. On death of the borrowers during the currency of the loan, the legal heirs of the borrower have the option to pay the loan amount and take possession of the property.