• Embed Doc
  • Copy Link
  • Readcast
  • Collections
  • 1
    CommentGo Back
Download
 
For more Notes, Presentations, Project Reports visita2zmba.blogspot.comhrmba.blogspot.commbafin.blogspot.com
PROJECT REPORT ON
“Reverse Mortgage in India”
IN PARTIAL FULFILLMENT OF THE REQUIREMENTFOR THE COURSE MASTER OF MANAGEMENT STUDIESSPECIALISATION:Finance
 
Index
TopicPage No.
Introduction4Reverse Mortgage in India5Indian Market Potential16Sources of Indian Data Relevant to RM23How Reverse Mortgage Works28Different Reverse Mortgage Offerings in India State Bank of IndiaPunjab National Bank DHFLUnion Bank LIC 313138404142Risks to Reverse Mortgage Lenders44Considerations in Product design48Welfare from Reverse Mortgage50Tax Treatment of Reverse Mortgage loans53Conclusions and Suggestions53
2
 
Introduction
Old age comes with its own share of problems. As a person grows older, and hisregular source of income dries up, his dependency on others can increasesignificantly. With health care expenses on the rise and little social security, living thegolden years respectfully can be quite a challenge for senior citizens. In such ascenario, a regular income stream that can help them meet their financial needs andmaintain their current living standards becomes important.One typical feature with most senior citizens is that their residential property accountsfor a significant portion of their total asset pie. And, given its illiquid nature, propertyfails to aid senior citizens on the liquidity front.In the
Union Budget 2007-08
, a proposal to introduce 'Reverse Mortgages' was putforth. To understand the concept of reverse mortgage, first let us understand what aregular mortgage is. In a regular mortgage, a borrower mortgages his new/existinghouse with the lender in return for the loan amount (which in turn he uses to financethe property); the same is charged at a particular interest rate and runs over a predetermined tenure. The borrower then has to repay the loan amount in the form of EMIs (equated monthly installments), which comprise of both principal and interestamounts. The property is utilized as a security to cover the risk of default on the borrower's part.In the reverse mortgage, senior citizens (borrowers), who own a house property, butdo not have regular income, can mortgage the same with the lender (a scheduled bank or a housing finance company-HFC). In return, the lender makes periodic payment tothe borrowers during their lifetime. Inspite of mortgaging the house property, the borrower can continue to stay in it during his entire life span and continue to receiveregular flows of income from the lender as well. Also, since the borrower doesn't have3
of 00

Leave a Comment

You must be to leave a comment.
Submit
Characters: ...
You must be to leave a comment.
Submit
Characters: ...