Reverse mortgage products in India: Gap analysis and policy research

Abstract

A reverse mortgage is a loan against home equity which provides cash advances to a borrower, and requires no repayment until such time as the home owner relinquishes his/her claim to the house. These instruments are different from a regular forward mortgage in mainly two aspects, the first being the fact that they reduce the equity of the original owner in the home estate while generating cash flows and secondly that the reverse mortgages don’t require borrowers to meet income or credit qualifications. It is a product which has been specifically designed to address the needs of senior citizens for whom a home forms the major share of their asset holdings which they can liquefy using this instrument to augment their incomes.