Bangalore, Apr 4 (UNI) Public sector bank Union Bank of India has launched its new product here today 'Union Reverse Mortgage Scheme' across the country intended to extend financial support to senior citizens having self-earned dwelling house.
Speaking to newspersons Union Bank of India General Manager, Bangalore zone L V N Rao said that the reverse mortgage, a concept of Western economy had slowly getting into Indian system following disintegration of joint and larger families into micro and sub-micro families.
He said that UBI, a mid-sized nationalized bank in India having clocked a business turnover of Rs 180,516 crore till March end has forayed into Reverse Mortgage segment, which enables senior citizens to obtain monthly payments against the mortgage of their homes so long as they continue to live in the home.
Mr Rao said that the loans under Union Reverse Mortgage Scheme would be available to those home owners who are 60 years of age or more and could be avail jointly with the spouse provided he or she is older than 55 years.
Outlining the design of the loan Mr Rao said that under the scheme there would be no repayment obligations on the owner as the loan becomes due only on the death of the owner of the last surviving spouse. On the demise of the last surviving owner, the legal heirs have the right to repay the loan. If they do not wish to repay the loan the bank would sell the property and set off the loan amount outstanding, and surplus if any would be given to the legal heirs, he said.
Mr Rao said that the already four to five other nationalized banks have already introduced Reverse Mortgage loan scheme however Union Bank of India's charges an interest rate of 10 per cent which is the lowest among others. Typically for a loan of Rs 10 lakh the monthly payoff to the home owner on a ten year loan would be Rs 4880 and on a 15 year loan it will be Rs 2410. Every five years the property is re valued and adjustments will be made to the monthly payments accordingly, Mr Rao explained.
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