Chennai, Apr 4: The Union Bank of India (UBI) today launched 'Union Reverse Mortgage Scheme' to benefit senior citizens across the country.

Talking to newspersons here, UBI General Manager P Y Nagar said ''the new scheme enables home owners especially senior citizens to obtain monthly payments against the mortgage of their houses so long as they continue to live there.'' The loan would be available to the owners, who are 60 years of age or more and could be availed jointly with spouse provided that he/she was older than 55 years, he added.

Mr Nagar said there were no repayment obligations on the owner as the loan become due only on the death of the owner or the last surviving spouse.

''Unlike other loan products, there is no 'income criteria' to be met for availing this loan,'' he said, adding ''on the demise of the last surviving owner, the legal heirs have the right to repay the loan.'' He said ''if they do not wish to repay the loan, the bank will sell the property and set off the loan amount outstanding.'' Surplus, if any, would be given to the legal heirs, he added.

Mr Nagar pointed out that this scheme could be availed at any branches of the UBI.

''The minimum amount of the loan that can be availed is one lakh and the maximum is Rs 50 lakh,'' he said, adding the maximum tenor of a loan under this scheme was 15 years.

The loan carried a fixded interest rate of ten per cent per annum with a reset at the end of every five years. Typically, for a loan of Rs 10 lakh, the monthly payoff to the home owner on a ten year loan would be Rs 4,880 and on a fifteen year loan it would be Rs 2,410, he explained.

He said every five years the property was revalued and adjustments would be made to the monthly payments accordingly.


UNI