How India’s Retirees Are Unlocking Wealth Without Selling Property
Most people build their own house using the savings they have worked for their entire life. After retirement, many people's income sources decrease, and they start thinking that they should not have spent so much money on a house. But how many people know that there is a plan to get up to Rs 1.5 lakh per month using this house? A post recently shared by investment banker and financial advisor Sarthak Ahuja on LinkedIn is now a big discussion. Through the Reverse Mortgage method, you can find money for your needs without selling your house. He also explains how it works.
What is a Reverse Mortgage
This is a plan in which you can take a loan from banks by giving your own house as collateral. But unlike traditional bank loans, there will be no monthly loan repayment. Instead, the homeowner will be given a fixed amount in monthly installments or in full. You will get Rs 1.5 lakh per month for up to 20 years. In return, 40 percent of the ownership of the house will be transferred to the bank. The main use is to make the most of the financial potential of your own house and find money for expenses in the later years of your life without reaching out to anyone.
Will you be evicted from the house?
You can live in the same house as long as the homeowner or partner is alive. The law says that they should not be evicted while they are alive. All the money received from the bank is tax-free. This is also a great option for retirees to find money for daily expenses and health care, Ahuja explains in a LinkedIn post.
Who will repay the money?
After the homeowner and partner die, their children and legal heirs will have some rights in this house. If desired, the heirs can own the house after paying the amount given by the bank, along with interest, through a reverse mortgage. Or, after selling the house, the heirs can take the remaining money after paying off the bank's liability.
Please Take Note of This
But it is good to remember some things. As the years go by, the money taken from the bank will increase along with the interest. The documents required to transfer the ownership of the house to the bank must be provided correctly. The owner is also responsible for resolving legal issues in the name of the house, paying taxes, and insurance. It is also a setback that the bank does not allow much time to pay off the liability after the death of the borrower and their spouse. Those in this field say that before taking such a loan, one should examine all the terms and conditions related to this and seek the services of an expert.
