After retirement, cash flow becomes limited, perhaps restricted to pension. Hence, some people may find it difficult to secure a home, as repayment could be a challenge. However, they still have some good options to show their worth, such as a reverse mortgage, that banks can’t ignore.

Here are some ways they can get bank home loans easily.

Regular Home Loans

Regular home loans are still available for senior citizens, but they may need to pay higher interest for a shorter term, up to 15 years. Due to higher risks, the maximum loan amount could also be lower than for young borrowers, up to 60 to 70 per cent of the property value.

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Pensioners’ Loan

Home loans are also available for pensioners. For instance, banks may be willing to give loans to pensioners with pension accounts in the same bank. This allows banks to process the loan faster as they will already have the clients’ know-your-customer details (KYC) and other necessary documentary proof for eligibility. This advantage may also help senior citizens bargain for lower interest rates for their home loans.

Reverse Mortgage

A reverse mortgage is a great way to get a loan. Under this scheme, you do not have to repay the loan if you live in the same house. But when you sell it, you must return the outstanding loan. The loan amount is determined based on the property’s future value, as real estate prices do not always remain the same. This potential increase in the property’s price gives the client a good bargaining tool to negotiate the loan amount and the overall deal. However, this option is not very popular in India; hence, consider all the pros and cons before getting the deal done.

Also Read: Kerala Jeevan Rekha Pension Web Portal: All You Need To Know

Good Credit Score

A good credit score means a good repayment history, which will enable you to secure a loan easily. A bad credit score shows means there maybe pending EMIs or a history of late repayment. So, if you have a good credit score it will be easier to get a loan even in old age.

Opting for Lower LTV

A loan-to-value (LTV) is the amount the bank is willing to pay against the property value. A lower LTV means lower equated monthly instalment (EMI), which allows seniors to repay the loan easily. Likewise, a higher LTV means higher EMIs, which can make repayments tougher. Suppose the property value is Rs 50 lakh and the loan amount is Rs 40 lakh; the LTV will be 80 per cent, which is quite high for senior citizens.