Reverse mortgage is a powerful financial tool which can be used to overcome the elderly people's regular financial problems. Reverse mortgage is a financial contract between the banker/lender and the senior citizens which enable the elderly people with above 60 years of age to receive regular stream of cash flows from their home/share in home without liquidating it. It is suitably named as reverse mortgage, as the lender makes payment to the borrower in opposite to the regular mortgage where the borrower makes payment to the lender. Here the senior citizens can have two kinds of payment option, i.e., the eligible persons can choose to obtain from the lender either the lump sum money or fixed monthly payment either for a predetermined period, or as long as the seniors live in that home or a combination of these. It bears the regular interest of 10 to 11% in India. The senior citizens who borrowed loan under reverse mortgage scheme can live in the mortgaged home for his entire life period and can receive money. In case of death of the borrower, their legal heirs have to repay the loan and can get back their asset or the bank can recover the money by selling the mortgaged property and the surplus money will be refunded to the legal heirs of the borrower. The detailed operational guidelines issued by the Reserve Bank of India have been explained below.

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