Just a few days ago I came across UN estimates of increasing life expectancy. It is estimated that India’s life expectancy will reach 82 by 2100. Life expectancy in the country is currently over 70 years. In 1950 it was 35.21, the data show. By comparing the data provided, life expectancy in India has improved by 57%.
The increase in life expectancy is attributed to numerous medical and health advances. If we consider the rush of Covid-19 infection to human homes around the world, we find that the invention of the vaccine against the virus saved humanity from extinction. Unfortunately, millions of precious lives have been consumed by the virus in different regions. The point of reference on the Covid-19 infection is that the creation of vaccines against deadly viruses has been one of the most important medical interventions that have significantly reduced mortality rates. In fact, numerous medical and health interventions have led to an improvement in life expectancy in India.
You must be thinking why I am talking about life expectancy. Basically, the theme of today’s straight talk is about elders, more specifically retired government officials. Today’s topic is based on an email from a state pensioner who is currently in his second year of retirement and receives his monthly pension from a bank branch. The retiree is looking for a home loan but is reluctant to contact the bank for the facility. He asks: Isn’t there a special home loan program for retirees like him? Interestingly, he has cited increased life expectancy as a plea to bring retired government employees into the scope of home loans and other programs. However, he was specifically looking for details on home loans for retirees.
In general, obtaining a professional home loan is considered a lengthy process as it requires lengthy paperwork and various approvals. And for retirees, getting a home loan seems impossible because their age is not taken on their side and their income is limited. However, banks and non-bank financial firms have set up home loan programs for retired government employees. So there are definitely ways and means for a retiree to get a home loan against their pension and other income, if any. However, the retiree can get the loan from the bank where he has a retirement account. However, some banks provide home loan facilities to retirees who maintain their pensions with other banks. Normally, the amount of the home loan to retirees is linked to their pension. However, if the pensioner applies for the loan with his children or spouse, he will receive an increase in the loan amount and also receive tax advantages.
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Meanwhile, J&K Bank has established a home loan program for the general public that also accepts state retirees. Retirees of UT/central government, state/semi-state corporations, autonomous corporations and state institutions are eligible to receive a home loan from J&K Bank for the purpose of purchasing a piece of land for the construction of a residential building thereon; for house/residential construction; direct purchase of a built house/apartment (completely built or under construction); for repairs and renovations/additions/changes or finishing of the existing house. Here are some key features of J&K Bank’s home loan program for state retirees:
What is the maximum loan amount granted to a retiree under the scheme?
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If a pensioner wants to get a loan to build/buy a house/apartment, the bank approves the loan based on the cost of the project. However, the pensioner has to pay the margin and the bank will also link the loan amount to his ability to repay. The margin is between 10% and 20% depending on the amount of the loan.
For the purchase of land to build a house, the maximum financing amount is at least 75% of the cost of the land, 75% of the total home loan eligibility and is subject to a maximum of Rs.75 lakh.
For the addition/modification/completion of the house, the retiree will receive a loan amount based on the estimated cost of the addition/modification/completion of the house minus the specified margin, subject to obtaining any necessary permits from the relevant authorities got to .
For repairs/renovations/, the loan amount is linked to the estimated cost of repairing/renovating housing units less a specified margin.
Notably, loans for the repair/renovation of a single home can be drawn multiple times.
It is also worth noting that retirees’ total deductions (excluding conversion) cannot exceed 50% of their net monthly pension/income.
Which documents must be submitted by the pensioner as proof of income?
The documentation in this regard is very simple. According to the bank’s scheme, the pensioner must provide a copy of the PPO and the monthly pension certificate. If a retiree does not have a retirement account with J&K Bank, they must provide a retirement account statement for the past six months
What is the repayment schedule of the loan for pensioners?
For retirees, the loan is repayable in EMIs (equivalent to monthly installments) until the retiree turns 75. In cases where spouses, children, siblings are made joint borrowers/co-borrowers, the age of the youngest borrower/co-borrower may be taken into account for the life of the loan, provided that his/her contribution to EMI is at least is 40%.
What other specific conditions does a retiree need to know?
In cases where the applicant applies to the Bank to obtain a loan facility to purchase land/land, he/she must declare, by means of an affidavit of undertakings, that he/she intends to build a dwelling unit on said land will start land/land within 02 years and completion of construction within 03 years from 01.01St payout.
In cases where the applicant owns land and applies to the bank for a home construction loan, a copy of the permit and approved plan/plan from the relevant authority on behalf of the person applying for the home loan facility to be submitted to the bank.
In cases where the applicant wishes to obtain a loan for the purchase of a constructed house/apartment, he/she must declare by means of an affidavit that the constructed property has been constructed in accordance with the approved building plan.
Should retirees provide a third party guarantee as additional security?
Yes. Retirees receiving the home loan must provide a third-party guarantee from the spouse/legal heir who is entitled to the family pension, along with an additional guarantee from a person. This is in addition to the mortgage on the home for which a loan has been obtained.
