8/7/2019 REVERSE MORTGAGE LENDERS 2

1/21

REVERSE MORTGAGE

LENDERSIN INDIA

8/7/2019 REVERSE MORTGAGE LENDERS 2

2/21

3

2

1

NATIONAL HOUSING BANKS

DEWAN HOUSING FINANCE LIMITED

INDIAN BANK

4

PUNJAB NATIONAL BANK

5

STATE BANK OFINDIA

6

CENTRAL

BANK

8/7/2019 REVERSE MORTGAGE LENDERS 2

3/21

ELIGIBLE BORROWERS

Should be Senior Citizen of Indiaabove 60 years of age

Should be the owner of aself- acquired.

The residential

property should befree from any encumbrances.

The residual life of the

property should be at least 20years.

8/7/2019 REVERSE MORTGAGE LENDERS 2

4/21

Determination of Eligible Amount of Loan

Market value of residential property

8/7/2019 REVERSE MORTGAGE LENDERS 2

5/21

The equity of the borrower in theresidential property (Equity toValue Ratio - EVR) does not at anytime during the tenor of the loanfall below 10%.

8/7/2019 REVERSE MORTGAGE LENDERS 2

6/21

Up gradation, renovation and extensionof residential property.

Home improvement,maintenance/insurance of residentialproperty.

Medical, emergency expenditure for maintenance of family

For supplementing pension/other income

Eligible End use of

funds

8/7/2019 REVERSE MORTGAGE LENDERS 2

7/21

Circle rateof a

property

Appraisalvalue of aproperty

8/7/2019 REVERSE MORTGAGE LENDERS 2

8/21

MarketValue of a property

Appraisalvalue of a property

8/7/2019 REVERSE MORTGAGE LENDERS 2

9/21

Th elongitivity

andstructuralviability

Appraisalvalue of a property

8/7/2019 REVERSE MORTGAGE LENDERS 2

10/21

Maintenanceof theproperty

Appraisalvalue of a property

8/7/2019 REVERSE MORTGAGE LENDERS 2

11/21

Appraisalvalue of a property

Infrastructureand amenities provided

8/7/2019 REVERSE MORTGAGE LENDERS 2

12/21

CivilEngineering

parameters

Appraisalvalue of a property

8/7/2019 REVERSE MORTGAGE LENDERS 2

13/21

N ot at t h esame levelAppraisalvalue of a property

8/7/2019 REVERSE MORTGAGE LENDERS 2

14/21

First issue:Mortgage of property for obtaining a loan is transfer within

the meaning of the Income-tax Act.Transfer within the meaning of the Transfer of Properties

Act includes some types of mortgage.

Clause (xvi) in section 47 of theIncome-tax Act, 1961 has been inserted toprovide that any transfer of a capital asset ina transaction of reverse mortgage, made andnotified by the Central Government shall not be regarded as a transfer.

8/7/2019 REVERSE MORTGAGE LENDERS 2

15/21

S econd issue:The loan, either in lump sum or in instalment, received

under a reverse mortgage scheme amounts to income.

Any amount received by an individual as a loan, either in

lump-sum or in instalment, in atransaction of reverse mortgagereferred to in clause (xvi) of Section47 of the Income-tax act shall not beincluded in total income.

8/7/2019 REVERSE MORTGAGE LENDERS 2

16/21

R everse mortgage is popular in western countries. R everse Mortgage has not yet met with success in India. The reasons

for this are social, rather than financial. In the Indian society,

the residential house is invested with a lot of emotions and sentiments.As per our societal norms, very often children choose to stay with their parents. As such, the senior citizens become almost duty-bound toretain the ownership of the house.

All these facts when combinedtogether weaken the case for reversemortgage in India.

8/7/2019 REVERSE MORTGAGE LENDERS 2

17/21

Y et, a beginning seems to have been made. As of yet, most of the customers who are opting for reverse mortgage in India belong to the upper-

middle class, who have a self-owned house, andtheir children are employed and settled elsewhere.

W ith the passage of time, we are likely to seemore people going for the option of the reversemortgage.

8/7/2019 REVERSE MORTGAGE LENDERS 2

18/21

8/7/2019 REVERSE MORTGAGE LENDERS 2

19/21

8/7/2019 REVERSE MORTGAGE LENDERS 2

20/21

8/7/2019 REVERSE MORTGAGE LENDERS 2

21/21