We have heard about mortgage-loan against property. Then what is reverse mortgage. Exactly the same but the EMI is paid not by the benificiary. Where as in mortgage, the benificiary pays the EMI for a property for the loan availed. In reverse mortgage, a flat which is occupied by the applicant is mortgaged and a monthly payment is given by the bank. With every payment the bank's ownership of the house increases.The money received is a loan hence it is tax-free.
After the benificiary's death, his/her heirs start servicing the loan. Only senior citizens are eligible for this facility. Also they should be living in the house that is mortgaged. For people in their sunset years, it is a godsend scheme.
