Why Reverse Mortgage Concept Failed in India?

Reverse mortgage is an effective tool that is popular among Western countries like United States. In India it was introduced 7-8 years ago but failed to pick up as it was expected.

 

What Reverse Mortgage is?

It is a peculiar type of loan that can be availed against home. It allows the borrower to convert an equity portion of property to cash. Reverse mortgage allows the borrower to get a regular income for his or her self occupied home. It is specifically beneficial for the retirees or the senior citizens. When an individual mortgages its house to finance institute then he is likely to get a particular lump sum amount periodically at defined interest rate. The tenure is generally 15-20 years. After completion of tenure borrower has either to repay the loan amount or the institute will compensate it by selling the house. 

Eligibility 

To avail traditional mortgage, the borrower has to show enough income versus debt ratio and should be able to make monthly payments towards mortgage. On the other hand in case of reverse mortgage, borrower gets the payment regardless of the income or asset. Borrower’s age, interest rate, loan fees and escalated value of the property are the key considerations in reverse mortgage. It does not even require the credit history of the borrower as the property itself is mortgaged. 

Why it failed in India?

Despite its acceptability over worldwide and so many advantages, it did not manage to attract the Indian market due to several reasons. Home is considered as a family asset in India. Moreover the loan amount that can be sanctioned is Rupees 50 Lakhs to 1 Crore which seems not so lucrative for those living in the core of cities with the asset of value Rupees 1.5 Crore to 3 Crore. Structure is another reason for its failure. It is not liable for lifetime income.  Hence it failed to captive Indian market. 

HDFC Mortgage is the ladder to realize your dreams without being burdensome. Its loan products are available at lucrative interest rates and hassle free documentation.  

Refinance Your Loan and Grab the Chance to Save Cash

When one chooses to refinance his loan then he has own reasons to opt for that. The usual reason is to save cash or take some money out. It is an excellent way to reduce the financial burdens and tensions. It is an awesome financial tool that helps you in achieving the long term goals and gets the monthly budget in line. To alleviate the financial stresses and ailments you can owe this tool to yourself. Other reasons that make the borrowers to refinance are lower interest rates and switching the mortgage. Sometimes people get trapped if they do not collect information beforehand. It is necessary to do the homework. To speed up the approval process we are enlisting few tips here:

Income Verification

Creditors verify the financial means to ascertain that you can repay the debts. Document verification is the basic thing that the lending institutes perform. In addition to these there may be some field investigation too.

Credit Score

 

The lenders will check your credit score through CIBIL credit report. Before apply you should receive your reports and avert the ambiguous points. 

Asset Verification

You should have copies of checking and savings accounts statements, other statements of stocks or mutual funds etc. (if you possess any of them). These statements are provided as a proof of any other assets that you possess except your employment. 

Accountability Verification

Collect the statements of all outstanding loans inculcating the mortgages, equity loans, car loan, education loan or personal loan. In addition to these you also need to show the statements for credit card account, scheduled alimony and any ot

her outstanding debts.

Insurance

Insurance depicts your financial responsibility. Creditors will check the policy declaration page listing types and accounts for your home protection. 

Keeping the above points in mind you will certainly get the best deal that will fulfill your financial requirements. HDFC bank is one of the major banks providing the refinancing tool to eradicate your financial worries. Attractive interest rates, easy documentation and amiable staff will show you the easy financial path. So avail the HDFC Refinance tool now.