Reverse Mortgage is a loan for senior citizens

A Reverse Mortgage is a loan for senior citizens where they do not have to repay loan as long as they continue to live in their home. The owner’s responsibility to pay back the loan is delayed until the owner dies or the home is sold, or the owner moves.The loan becomes due when you sell the property, moves to another house or dies. If one of the spouses dies, the other can continue living in the house.

Valuation of the residential property would be done at such frequency and intervals as decided by the reverse mortgage lender, which in any case shall be at least once every five years.The homeowner’s obligation to repay the loan is deferred until the owner dies, the home is sold, or the owner leaves (i.e. moves to aged care).

In case you and your spouse die your heir can settle the overall outstanding loan and retain the house. If your heir fails to retain or settle the overall outstanding loan, the bank will proceed to settle the outstanding loan and give the rest to the heirs.Reverse mortgage is loan and not income, hence the same will not attract any tax liability.

Useful link to refer

Workings of Reverse Mortgage

Buying property with home loan for NRIs

If you are of an Indian Origin and holding an Indian Passport then you are entitled to buy any property. Person or Persons of Indian Origin need not require any approval by the Government of India to buy immovable properties. If you are buying the property through your NRE (Non Resident External) accounts, then you could repatriate your sale proceeds and rental income to your foreign account.

When Buy your property with a home loan,Your personal documents required for your home loan pre-approval only. Disbursement will happen only when you buy the property.

Documents required by salaried (Non Resident Indian)

1. Loan application form duly filled and signed. Two photographs of both the applicant and the co-applicant with signature on front and back.
2. Copy of passport. (Along with latest visa stamp and date of entry stamp), Proof of residence in India. (Electricity / Telephone bill / Ration card / Society maintenance bill / LIC Policy / Mobile bill / Utility bill like Gas Supply bill), Proof of residence in Abroad (Electricity / Telephone Bill / Mobile Bill / Utility Bill e.g. Gas Supply bill / Driving License), Copy of Identity card / Social Security card / Work permit (Hikama) Copy of credit card. Last six months bank statements of all the NRE / NRO account in India.
3. Last six months bank statements of bank account held abroad where salary is credited Copy of Contract / Employment Certificate Copy of Annual Salary Certificate specifying the mode of payment (If payment is fully or partly received in cash) Salary Slips for the immediately past 06 months.
4. Copies of Sanction Letter of Loans availed in India and abroad Self Declaration of Residential Status Initial Processing fees cheque of Rs 5612/-, this is charged by the Bank, we can do away with this for the time being and once you want to have the application approved you please send this to us.
5. Please note that all the above documents need to be certified by the Indian Embassy abroad. Documents relating to income / salary needs to be attested as true by your employer.
6. All documents in foreign language need to be translated in English.

Links to visit
Investing in a Second Home

Insurance for Home Loan

Planning for Home Loan

Banks and lending company has reduced its interest rate and simplified home loan process. Low interest rate and competitive scheme has made home loan easy reach of common man . If you are first time buyer or planning for home loan, here are guidelines for you to plan your home loan.

Know your lender: Before you choose or sign for a home loan, know your lender. Make good market research on rate of interest, processing fee, penalties and charge for pre-closure. Choose the lender who offers best deal that suits your need and requirement.

Hidden Charges: Hidden charges are not really hidden but borrowers may fail to note or ask lender before signing or applying for loan. For home loan, borrowers need to pay down payment which may be about 20 to 25 percent of property price. In addition to the down payment, borrower will have to pay processing fee and other expense on sanction of home loan. Be prepared to pay some extra other than these charges.

Credit history: Credit history is history of your past borrowings and repaying behaviors. These factors help lenders determine whether to extend credit, and on what terms.

Income Proof: When applying for loans or advance, you will have to show your income source. It can be either from your business, salary or other source. For income proof, you need to provide bank statement for last six month and two years financial if self employed.

Know your insurance company: When you are buying a home or applying for home loan, you need to insure your property and home loan. In case you loss your job or met with accident or in case of death, insurance company will help your family to payoff outstanding loan without causing burden of loan or interest.

Your lender or lending company may not be best person to ask for advice. Make good market research and discuss with your accountant or financial adviser. Contact as a many lender as possible before choosing one for loan or advance. Choose the home loan that best suits your need.

Caution against unincorporated Lenders

Lending and borrowing is common in today’s world. There are number of banks and financial institutes come up with new scheme or offer to attract borrowers or customers. RBI cautioned public to verify the credentials before dealing with unincorporated lenders.

RBI caution public to verify the credential of bank or institutes before approaching for personal loan or paying processing fee for them. It is recommended to deal with bank or institutes who have years of experience in lending loans and advances such as personal loan, car loan and other long term loans.

The central bank said it noticed that certain entities are issuing a spate of advertisements in newspapers offering personal loans, loans against property and other loans, at a very low rate of interest. In the advertisements, these entities indicated their mobile phone numbers for the prospective borrowers to correspond, the bank added.

It has also come to the notice that some of these entities are cheating the public by charging processing fees upfront and disappearing thereafter. Reserve bank cautioned public before dealing with unincorporated lenders. Borrowers are advised to exercise utmost caution and verify the credentials while dealing with them.

Reference

RBI cautions public against unincorporated loan providers

Guidelines for Easy bank loan

Bank and financial institutes play vital role in helping you or customers to meet their immediate requirement and overcome financial debts. Good planning and market research helps you to get bank loans easily and payoff the debts without any burden or increasing your monthly expense. Here are some tips for you to get easy bank loan.

Tips for Easy bank loan

Right lender for your loan: It is important to get a right lender who offers special or attractive offers exclusively for you. First and important thing for bank loan is right lender. You must contact two or more lender before you choose right lender. It is important to take some time and be a little selective, when loan is for home loan or loan for long duration.

• Scheme: Some banks or financial institutes follow fixed interest rate or fluctuating interest rate. In some schemes, the rate is fixed, but only up to certain duration and subject to some terms and conditions. Therefore it is important to check the track record of interest rate and check the scheme for processing fee, penalty, late fee etc.

• Budget: In some case, interest rate may fall or be lower than interest rate when borrowing loan. In other case, borrowers will have to pay higher interest rate based on market condition and terms and condition of bank or lending company. Borrowers must have budget to afford higher interest rate or other expense relating to loan.

Take some time and make good market research to find the loan affordable by you and the lender who helps you to clear your debts easily. Right scheme and right lender plays vital role in getting loan easy and make prompt payment.

Easiest Way To Clear Credit Card Debt

Credit card is one of the easiest and convenient ways of paying for goods or service received. A financial institute allows agreed credit limit to their customer to buy goods or service. Bank and financial institute allows small short term loans for specific period and if the customer makes any default in paying the debts in specified period, interest or penalty will be charged on outstanding amount.

Tips for you to clear your credit card debts

If you use credit card responsibly, credit card can be great financial tool and if you use them carelessly, the same can put you in debt trap. You may be looking for best or easiest way to clear your credit card debts and bring your debts under control. Here are some tips for you to clear your credit card debt easily.

Don’t roll over credit: You must pay off your monthly debts in the period or time allowed by your lending company or bank. Roll over of credit will slowly lead you to debt trap. Pay off all your debts on or before due date.

Limit the number of credit card: You may have two or more credit card which makes you difficult to pay its due on or before due date. Limit the credit cards number to one or two and use them responsibly. If you want, you can use two credit cards one for daily purchase and other for bigger purchase. Remember, paying off credit card debt dues on or before due date enable you to get reward points and cash back.

Personal loans: Consolidate your credit card debts and take personal loan to clear all dues. Personal loan is cheaper when comparing the interest rate with credit card. Credit card charges high rate of interest or penalty for your monthly dues.

Loan from family or friends: You can take loan from your family and friends for paying off your debt or credit card dues. The advantage of such loans is they will not charge you interest and you need to pay only principal amount. You need to pay fixed amount in every month and prompt payment will enable you get more help from your family or friends in future.

Stop using credit card: If you are not able to payoff your monthly dues, stop using credit card until you clear all your debts on your credit card. When paying your monthly debts, pay more than minimum amount due in your statement.

If you use your credit card responsibly, your credit card is great financial tool for making payment for goods or service purchased and secured way to book online tickets and deal with online merchants. Remember to payoff your credit card debts on or before due date and never roll over your credit card debts. Prompt payment will enable you to get reward, cash back and increase in your credit limit. Keep your credit card debts under control and get most from your credit card.

Things To Consider When Applying For An Auto Loan

Auto loan is personal loan which can be either secured loan or unsecured loan. Lender offer loan to buy a new car or exchange your old car with new or loans for borrowers who are looking for own vehicle.

Having your own car or vehicle may be your dream and Banks or lending companies offer auto loan for making your dream come true. You need to consider following things when applying for an auto loan easy repayment of loan.

Consider following things when applying for an auto loan

Credit Report: Before applying for auto loan, check your credit report. If your credit report is good, you will get your loan for low interest rate and you will have more auto loan choice.

Affordable rate: You need to know about your income and monthly expense. This will help you to know the amount you can afford to pay for your auto loan. Analyze your budget when applying for auto loan. Choose auto loan that offers loan at affordable rate.

Know your market: Do not apply for loan with your first lender or bank. Make good research on available loan rate and other benefits. Bargain with your lender and choose your lending company or bank that offers you best.

Secured Loan: Secured loan enables you to increase chance of getting your loan. Secured loan is personal loan where borrower gives collateral security against his loan. In case of auto loan, car or your automobile itself is used as collateral. In case you default on repayment of loan, lender will take car or vehicle to pay off the cost or lose he incurred. This type of loan is safe for lender and they compete to offer you loan at cheap rate.

Increase down payment: You can get better deal if you pay maximum down payment and your monthly repayment becomes smaller. Even if you have bad credit history, paying maximum down payment increase the chance of approval of your auto loan.

You need to know your budget and monthly payment towards auto loan. You need to discuss about auto loan you are going to apply with your financial advisor to get best deal. Make good market research and apply for auto loan from bank or lender who offers you best.

Important banks for Auto loans

State Bank of India

HDFC Bank

ICICI Bank

Bank of India