LIC Housing to launch reverse mortgage after insurance tie-up
Press Trust of India / Mumbai Dec 25, 2008, 15:25 IST
Home finance company, LIC Housing Finance (LICHF), is awaiting the National Housing Bank's tie-up with insurance companies before launching its reverse mortgage scheme for senior citizens.
"We have the product but we are waiting for certain clarifications on tax issues and the insurance tie-up. The taxation issue has been cleared and once the insurance tie-up is done, we will launch the product," LIC Housing Finance Director and Chief Executive R R Nair told PTI here.
The National Housing Bank (NHB) is tying-up with insurance companies, including LIC, for restructuring of reverse mortgage.
Reverse mortgage is a financial product that enables senior citizens (60-plus) who own a house to mortgage their property with a lender and convert a part of the home equity into tax-free income without having to sell the house.
"We do not have any date fixed for launching as we do not know how much time this (insurance) tie-up will take," Nair said, adding there was no upper limit in reverse mortgage as it was the percentage of property prices.
The percentage depends on discounting and age of the owner (life-expectancy), amongst others, he said.
Reverse mortgage would prove very beneficial for those senior citizens residing in India but whose children were settled abroad, he said. "For an NRI, spending a few lakhs on a property which can help his parents live in comfort and with which they could also generate income was not a big thing."
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