Ask Us: Mortgage Loan

Reverse mortgage is a good option for the elderly to be exercised in case of no other avenue for funds

Written by Adhil Shetty | Published:April 2, 2012 1:58 am

I am a senior citizen in urgent need for funds. I have been advised to take a reverse mortgage loan. However,I am also repaying a home loan,which is due to be completed in a couple of years. Do you think I will still be eligible for it?

—Rahul Khullar,Mumbai

Reverse mortgage is a good option for the elderly to be exercised in case of no other avenue for funds. According to NHB (National Housing Board) rules,you will still be able to take up a reverse mortgage loan subject to the condition that the ownership of the house once you have cleared the loan solely belongs to you,has clear titles and is self acquired.

I twice defaulted on my credit card unintentionally but have made the payment since. But I notice it has affected my credit score. Is there a way I can improve it?

—Kuntala Banerjee,Delhi

Just keep paying the full amount due,well before the due date and keep your credit limit optimal. That does not mean you refrain from using your credit card. By all means use your credit card but keep a close tab on payments. This way your credit score will gradually improve.

The more you utilise your credit responsibly,the better the score,so create a good repayment track record before you prepare to take up a loan from a bank.

Is home insurance mandatory? I am currently shopping for a home loan and find most banks insisting on it?

—Vinay Dixit,Lucknow

Home insurance is not mandatory. However,it is important as your home is an asset you will spend most of your life savings on,hence it makes sense to protect it from dangers like theft,natural calamities etc. Having said that,do remember that it is not essential to take your home insurance through the bank you are taking a home loan with.

Instead,you can opt for it as a separate cover with an insurance company of your choice. Though some banks offer free insurance,it’s better to understand the pros,cons and riders associated with it,before you take it. Banks insist on it as during the loan tenure if anything were to happen to the mortgaged property,then they are at risk of losing the collateral pledged for the loan.

—The expert is CEO,Bankbazaar.com
For your personal finance queries please email at expressmoney@expressindia.com

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