Home Equity Conversion FAQs: Everything You Need to Know
HABIL helps seniors leverage their home equity through structured Home Equity Conversion plans, ensuring a steady monthly income to cover living expenses without depending on their children or selling their home
Mortgages on self-occupied real estate (a house or an apartment) are used to supplement senior citizens' cash flow streams and meet their financial needs. To put it another way, the borrower receives a monthly income (annuity) from the bank rather than paying EMIs on a monthly basis.
Each bank has a different limit to be offered under Home Equity Conversion
One of the borrowers should be atleast 60years of age and the spouse should be atleast 55years of age. NOTE : In case of Punjab National Bank, the spouse age is floored at 58years of age
Under a home equity conversion, the borrower receives a monthly annuity from the bank in exchange for a mortgage on their primary residence.
No
No
Credit score is not a criteria to apply for a home equity conversion loan
Not necessarily. After the loan period is over, the borrower won't lose their property if they pay their debts in full. Also, as long as the owner of the property stays alive, they get to stay in the property
Property is owned by borrowers. Nevertheless, he is required to mortgage the property with the bank and is unable to sell the property without paying the bank's debts.
Only when the final surviving borrower passes away or wishes to sell the house or transfer ownership of the home to a Third party or family member will the loan become due and payable.
The loan won't become due and payable until the last surviving borrower passes away, sells the house, or wants to permanently move into an institution or a relative's home for elderly care.
Current scenario : Yes, they can. This needs to be written in HABiL context
Legal heirs of the deceased borrower will be given priority by the bank to pay off the loan without having to sell the property. The Bank will settle the loan by selling the property, though, if the legal heirs are unable to pay the obligations (o/s amount plus interest).
Current scenario : No. This is not allowed. This needs to be written in HABiL context
The term of the Home Equity Conversion varies from bank to bank, with the highest tenure being 20years
Interest must be paid by the borrower or the borrower's legal heirs in order to repay the loan account.