Look no further for a creamy and ultra smooth classic cheesecake recipe! Paired with a buttery graham cracker crust, no one can deny its simple decadence. For the best results, bake in a water bath.
As much as I love cheesecake, I’ve never published a classic cheesecake recipe. There’s always been peanut butter, sprinkles, blueberry swirls, Snickers cheesecake, pumpkin, lemon, red velvet, or Nutella. That’s a lot of cheesecake recipes without a single nod to where it all originates: classic cheesecake.
Reverse Mortgage Loan in India and How does it Work?
Reverse mortgage in India is slowly but surely becoming an acceptable means for the elderly to lead a dignified life through income from the home that they once built while they were earning.
Mr. Menon has been retired for almost a decade now and has been living a peaceful life with his wife. However with the rising cost of living and extra expenses of health care , he finds it difficult to survive on his meager pension alone. Having been an upright and sincere government servant throughout his life his only asset today is the house he built from the employee soft loan almost 2 decades back.
His self esteem forbids him to ask money from children who are settled abroad. Reverse mortgage is an option that Mr. Menon was completely unaware of till recently. He can now opt for using his home to create financial security for himself and his wife without sacrificing his pride. This relatively lesser known concept of reverse mortgage in India is rapidly gaining acceptance in our society.
What is a Reverse Mortgage in Simple Terms ?
Reverse mortgage loan in India works just opposite of the conventional home loan. Here the owner offers the bank his house in lieu of money, where the bank does a valuation based on real condition of the house and the market prices. The bank then pays the owner the decided amount in installments as agreed upon providing a regular source of income till the time of death of the owner or the spouse after which the bank takes over the rights to the house.
How does Reverse Mortgage Work – RBI Rules ?
Reserve Bank of India is conservative while setting the norms for such transactions.
- The total amount of money that bank shall pay to the owner in such an arrangement shall not exceed 60-90% of the prevailing market value of the house at the time of pledging it. Reverse mortgage loan formula is nothing but 60-90% market value of the home will be given as loan.
- Borrower has the option of taking payment in monthly, quarterly or yearly mode but the maximum payment cannot exceed Rs. 50,000 per month
- The borrower also has an option of taking lump sum payment which is 50% of the eligible amount but cannot exceed more than Rs. 15,00,000. The option is available only once for the purpose of any medical emergency for the borrower, his/her spouse or any dependent.
- The total period of payment by the bank taking the mortgage shall not exceed 15 years. But some banks are actually giving for a longer period.
- Banks need to reassess the prevailing value of the property every 5 years to find out the financial viability of the mortgage.
- The banks are at liberty to introduce a fixed or floating interest rate as per the convenience of the owner who mortgages the property.
Reverse Mortgage Eligibility Criteria
How do you qualify for a reverse mortgage?In order to be able to avail this facility the elderly citizen seeking the mortgage must fulfill the following criteria.
- The owner who mortgages such property should be at least 60 years of age and the spouse who becomes a co borrower in this case must be above 58 years.
- The house must be self acquired and self occupied by the borrower at the time of the mortgage.
- The borrower must be the clear owner of the property and the house must be free from all encumbrances.
- The bank must evaluate and determine that the expected life of the house at the time of mortgage is a minimum of 20 years.
How Reverse Mortgage in India is Settled?
Like any other mortgage the Reverse Mortgage settlement in India is also guided by a few laid down stipulations by the RBI.
- The borrower may sell the property to settle the outstanding amount due to the bank in between the stipulated period. Otherwise the repayment can also be done after the death of the borrower by the surviving spouse.
- The bank may even sell off the house to settle the dues after death of the borrower. If the proceeds are more than the amount due then the balance is paid back to the surviving spouse or the legal heirs.
Can you Pay Off a Reverse Mortgage early?
This kind of loan can also be foreclosed provided the following conditions are met.
- The borrower does not stay in the house for more than a year.
- Borrower defaults on tax payments.
- The borrower declares bankruptcy and abandons the place for good.
- If the borrower is renting out the house for income generation.
Reverse Mortgage Loan Example
Suppose Mr. Menon is 65 Years Old and his spouse is 62 Years old. They both are pensioner but the pension amount is not sufficient enough to sustain. Mr. Menon owns a house which is worth Rs. 60 Lacs. The bank is ready to give him the loan amount of Rs. 36 lacs on his house for which they will be paid Rs. 36000 every month for next 15 years. So Mr. Menon can live in the same house for next 15 years and get a monthly income too.