Poor credit score? Go for reverse mortgage loan against property

December 29, 2020 12:45 AM

The loan should be taken from a financial institution or approved chari-table institution for purpose of higher education.

It will be difficult to get a mortgage loan in such a situation.It will be difficult to get a mortgage loan in such a situation.

By Chaitali Dutta

I don’t have a good credit score and I have not paid my income tax for two years. Now, I want a mortgage loan against my commercial property. Will I be able to get a loan and what is the procedure for it?
—Mohammed Mustaquim
It will be difficult to get a mortgage loan in such a situation. There may be some NBFCs who may consider a loan, but the interest rate will be significantly higher than the market rate. You may consider a reverse mortgage loan where your property will be mortgaged to the provider, and they will pay you a fixed monthly payment for your living expenses. However, at any point, if you want to free your property, you have to pay back in lumpsum, the outstanding at that point.

My child pursued a two-year professional degree from the US and took a loan from a US bank. He is now working in India and repaying the loan. Can income tax benefit under section 80E be claimed?
—Neeta Sharma
Section 80E deduction is in respect of interest on loan taken for higher education. The loan should be taken from a financial institution or approved chari-table institution for purpose of higher education. Here we need to ensure that the University is an authorised education institute. As far as the bank is concerned, the section specifies that “financial institution” means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act), or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf. If these conditions are fulfilled, you will be able to claim the deductions.

I had taken a loan from LIC HFL. The amount credited as subsidy is very less. It is Rs 89,000 against eligibility of Rs 2.35 lakh. What will happen if I do a balance transfer of the loan?
—Sadeep Verma
Here I presume you are referring to the PMAY subsidy. The calculation of applicable subsidy is done by the NHB and they have certain parameters to calculate the same. As for balance transfer, you will have to pay back the pro-rata subsidy amount which will be unutilised to LIC HFL.

The writer is founder, AZUKE Personal Finance Advisory (www.azukefinance.com).
Send your queries to fepersonalfinance@expressindia.com

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