I am a 64-year-old retired government employee. I own a flat, whose market value at present is around Rs 1 crore. I need around Rs 3 lakh, which I want to repay in two years. As the loan required is small compared to the asset value, is it possible to mortgage just a part of my property? Can I take a reverse mortgage loan?
M. Kamalakar
Hyderabad

Lenders normally grant credit to persons who have a regular income. Since you are retired from your job and may not have any regular income, the lender may not grant you a loan against property.

Also there is nothing like mortgaging a part of the property. Regar-dless of the loan required, you will have to mortgage the entire property.

So this leaves you with the option of reverse mortgage. This facility is extended by scheduled banks and housing finance companies registered with NHB. The loan is provided on the ba-sis of equitable mortgage of your residential property.

The loan will entail monthly, quarterly, half-yearly or annual disbursements or a lump sum or as a committed line of credit or as a combination of the three. The maximum lump sum, which you can take, is restricted to 50 per cent of the total eligibility amount.

The maximum tenure of the loan is 20 years. The amount of loan can undergo revisions based on re-valuation of property at the discretion of the lender.

You and your spouse can continue to use the residential property as your primary residence till you are alive.

If you feel you can prepay the loan, you can exercise this option. There are no prepayment charges for this loan.

I am 32-years-old with an annual income of `2.5 lakh. I have been working for the last six years and want to know if I can get a loan to purchase a new car worth `3 lakh.
Ram Prasad
Chennai

You are eligible for a loan which is 2.5 to 3 times of your annual income. For a new car, lenders normally finance around 80-100 per cent of the ex-showroom cost (which excludes the octroi or local taxes levied, and insurance).

The loan tenure can be between three years to seven years. Based on your income, other outstanding loan commitments and your credit profile, you will be able to get the car loan of `3 lakh.

I am a businessman aged about 37 years with an annual income of Rs 3 lakh. I have an insurance cover worth Rs 9 lakh with LIC. As per my earnings, how much insurance does one require?

S.K. Goel Mumbai

Firstly you require life insurance only if you have any dependants on your income. If you have no dependants, you may not need any insurance cover.

Your existing insurance appears grossly inadequate unless you already have large value assets or you have another source of income.

A normal thumb rule is to have life insurance equal to around 10-12 times of your annual income.

So the parameter to be used would be your age, your income, number of dependents, lifestyle, and financial goals to decide on the total insurance cover required.

You should do a proper need-based analysis for your life insurance requirements. So either individual financial planners or firms like apnapaisa.com can help you in this.

Harsh Roongta is the chief executive officer of Apnapaisa.com. You can send in your queries to
movingmoney@deccanmail.com