Union Bank launches Reserve Mortgage scheme
April 5th, 2008 | by admin |Bangalore, April 4: The Union Bank of India on Friday launched its “Union Reverse Mortgage Scheme”, a loan product designed exclusively for the bennefit of senior citizens.
The bank is the fourth in the country to launch the scheme through which the loan seeker need not worry about re-payment and be assured of monthly income, the Bank’s Bangalore Zone Field General Manager L N V Rao told a press meet in Bangalore.
The loan will be availabale to homeowners who are 60 years of age or more and can be availed jointly with the spouse, provided he or she is more than 55 years old, he said.
Unlike other loan products, there is no income criteria to be met for avaialing loan. On the demise of the last surviving owner, the legal heirs have the right to repay. If they do not wish to do so, the bank will sell the property, set off the loan oustanding
The surplus, if any, will be given to legal heirs. The minimum loan amount that can be availed is Rs one lakh and maximum Rs 50 lakh, Rao said. Seventy per cent of the assessed value of the building would be the loan amount.
The maximum tenor of a loan under this scheme is 15 years. The loan carries a fixed interest of 10 per cent per annum. Typically, for a loan of Rs 10 lakh, the monthly pay off to the onwer on ten year loan will be Rs 4880 and on a 15 year loan, it will be Rs 2410, Rao said.
The property is revalued every five years and adjustments will be made to the monthly payments accordingly, he said. Rao said the borrower has to comply with certain conditions which include that he bear the cost of property insured against fire, earthquake and other calamities.
If the borrower ceases to stay in the house which has been mortgaged, the loan will be cancelled.
