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Key features of the reverse mortgage under the Reverse Mortgage Programme

Reverse mortgage

1. Flexible Payment term

The borrower can choose to receive monthly payouts for either a fixed period of 10, 15 or 20 years, or for his entire life, according to his needs. The borrower has the flexibility at any time during his existing payment term to apply to switch to another payment term.

2. Lump-sum payout

In addition to monthly payouts, the borrower may apply to borrow a lump-sum amount for a specific purpose, such as to fully repay an existing mortgage, to pay for repair or maintenance to his home, or to pay for medical expenses.

3. Flexible arrangement to rent out property

Mortgaged property can be rented out under specific circumstances for a higher income.

4. Lifetime home residence

After taking out a reverse mortgage, the borrower is still the owner of his property, and is entitled to continue to live in his home for the rest of his life.

If there are two borrowers and one of the borrowers has passed away, the surviving borrower is entitled to continue to live in the property for the rest of his life.

However, interest and mortgage insurance premium will be posted to the outstanding loan amount.

5. No repayment during lifetime

The borrower does not need to repay the outstanding amount during his lifetime, unless the reverse mortgage loan is terminated under certain specified circumstances.

6. No penalty for early repayment of loan

The borrower may repay the outstanding loan amount in full to redeem the property at any time with no penalty.

7. Six-month cooling-off period

The borrower may terminate the reverse mortgage loan for any reason within the first six months. Provided that the borrower notifies the lender within the first six months and repays the mortgage in full on the proposed repayment date, he will be given a refund and waiver of all mortgage insurance premiums. However, the borrower still needs to pay the accrued interest, financed fees (if any) and the relevant fees in relation to the termination of the reverse mortgage loan.