LIC Housing to combine reverse mortgage with insurance plan

MUMBAI:
LIC Housing Finance is looking to compound its contrary mortgage program with a
whole-life rente provided by a life insurer. This volition let place proprietors to
use their place to bring forth income for life as against for lone 15 old age as
provided under the present contrary mortgage schemes. The housing
finance arm of the Life Insurance Corporation on Thursday announced the launch
of its contrary mortgage scheme. This merchandise is available across the state for
senior citizens above 60 years. The loan can be availed of either singly or
jointly with a spouse, if the partner is also above 60. The
shortcoming of most contrary mortgage strategies is that it is available lone for 15
years. With the increased life expectancy, most borrowers are expected to
outlive the term of their contrary mortgage. Under present strategies while income
from the contrary mortgage prohibitionists up after 15 years, the borrowers end up with the
lender having a lien on their property. LIC Housing Finance chief
executive SK Mitter told ET that the company was in negotiation with insurance
companies to work out a strategy where place equity could be used to purchase an annuity
that supplies income for the full life span of the borrower. “We are
working out how to unify an rente program with this product” said Mr
Mitter. The contrary mortgage loan by LICHF will be offered at a fixed
interest rate, subject to reset every five years. Under the scheme, senior
citizens can help of the loan either on a monthly payment or on a hunk sum
payment or a combination of both. The place evaluated for the loan should
have at least 20 old age of residuary life. The upper limit loan balance shall be 90%
of the value of the place and the loan balance will include involvement till
maturity. The amount of the loan will take into consideration the
property value, age of the borrower, and the charge per unit of interest. The loan will
become owed and collectible lone when the last surviving borrower deceases or opts to
sell the home, or permanently travels out of the home.