To launch reverse mortgage product
LIC Housing Finance (LHFL) is awaiting clarity from National Housing Board (NHB) in order to launch reverse mortgage product – reported Business Standard.
Reverse mortgage is a loan product for aged 60 and above who can mortgage owned house for a lump sum or a monthly installment. The borrower or his legal heir can repay the loan and take back the property, failing which, the lending company can realise its funds.
R R Nair, director and chief executive of LHFL, said: “Currently, the loan period is around 20 years and if the borrowers survive that period it will be difficult for the lending institution to realise the funds immediately selling the property.”
NHB held discussions with insurance companies including Life Insurance Corporation of India, to design an annuity product so that the funds borrowed can be invested in that and a monthly income is obtained by the borrowers, quoted the magazine.