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Significance of Reverse Mortgage Market for India

    IndianMoney.com Research Team | Wednesday, March 25,2009, 03:02 PM
 

The society in India has under-gone huge changes in last 4-5 decades. Nuclear family has replaced the joint family system. The system of family supporting the older people has gone. As mentioned earlier the public pension system has not been able to provide an alternate support to old people. This condition leaves the older people in jeopardy. They face following issues

  • Outliving their retirement income
  • Depending on their children to help pay expenses
  • Getting sick and having no way to pay the expenses
  • Not being able to guarantee an income for their spouse after they are gone
  • Being able to live as long as they like in their own home

Looking at the current situation, the needs for a product which can help these people to solve some of these problems is always a welcome step. Reverse mortgage or equity release products tries to answer all these problems. Every Indian, irrespective of its income level tries to build a home for himself during his working life. Reverse mortgage will give him/her an opportunity to generate income from that very home.

As the ownership remains with the borrower, he can transfer the home to his successors also if the later agrees to pay the loan amount. Such a product relieves the pressure on government also to provide old age security and thus government also needs to support such initiative. Many economies have been benefited from this arrangement and the market for such products has increase quite a lot in these markets. Two such examples are the UK and the USA market.

IndianMoney.com Research Team

The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.

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