This scheme is eligible for an Indian citizen above the age of 60 years, owning self-acquired and self-occupied residential property in India. The scheme can be obtained singly or jointly with a spouse. The spouse should be older than 55 years and the number of surviving spouse on the date of sanction should not be more than one.
The residual life of property should be at least 20 years and it should be free from encumbrances. The borrower should use that property as his permanent primary resistance. It should be a self-acquired and self-occupied residential property where a person spends most of his time.
Few features of the loan include:
The maximum loan is up to 60% of the value of the residential property.
The maximum period of property mortgage is 15 years with a bank.
The borrower can apply for monthly, quarterly, annual or a large sum together at any point.
The property is reevaluated every 5 years.
The amount received is considered as tax and not income, thus there is no tax liability.
A penalty of 2% on the average balance of the past 12 months is charged if the loan is shifted from one bank or financial institution to the other.
If one of the spouses dies, the other can still continue living in the same house and prevail the loan. If both die, the bank will give their heir two options:
Either settle the overall payment with interest and retain the house, or
Bank will sell the house and use the money to settle the loan.
In case of childless seniors, relatives who are either in possession of the property of the senior citizen or would inherit it, are legally liable to look after and maintain the elderly. Failing to this can lead to legal action against them.
It is the exact opposite of a home loan, thus elders do not have to depend upon anyone for money during emergencies or for daily expenses.
This scheme has a very simple eligibility criterion. Anyone above the age of 60 with a self-acquired and self-occupied property can avail this scheme.
It allows elderly to get a steady monthly income by mortgaging their house.
It has a flexible payment option. Borrower can take the money monthly, quarterly, yearly or during any emergency.
Since the money received is considered as a loan and not income, it is free from tax liability.
The loans can be paid any time during the tenure with interest without extra charge.
The house owners are protected against inflation.
Following are the financial institutions that provide this scheme in India:
Dewan Housing Finance
State Bank of India
Punjab National Bank
Bank of Baroda
Central Bank of India
Union Bank of India
LIC Housing Finance
A form for the scheme is available online as well as in the offices. The form should be submitted along with proof of identity (passport, pan card, employee identity card), proof of address (electricity bill, telephone bill, ration card), Pan Card, property papers (proof of ownership, title deed), 3 photographs or any other document required according to the form.
Next, the amount is sanctioned and approval is given for a specific loan amount based on the value of property and repayment capabilities.
Then the loan is disbursed within 7 days..