The Government Savings Bank (GSB) will relax certain rules on its reverse mortgage loan, aiming to widen the access for senior people to the service, GSB president Chatchai Payuhanaveechai said.
Growth has been slow for the loan programme, amounting to Bt400 million and Bt500 million since its launch early this year.
Chatchai attributed the main obstacle to growth to a condition that requires the borrower to secure signatory consent from his/her relatives on the loan. This has led to worries on the part of the relatives that they would have to share responsibility with the borrower, he said.
The new condition will require only that the relatives witness the transaction.
A reverse mortgage allows homeowners to convert their residence into cash. Instead of making monthly payments, they will gradually receive the loan amount in instalments over a long period until death or until the approved loan amount is fully exhausted.
GSB provides reverse mortgage loan at the proportion of 70 per cent of a house or a condominium unit’s value but not exceeding Bt10 million per person. In the case of condominium units, the appraised value has to be at least Bt1.5million.
As part of its reverse mortgage loan conditions, the age of borrowers has to be at least 60 but not exceeding 80 and being the owner of a property which is debt free. The maximum term for the loan agreement is 25 years.
Source: The Nation