Money Matters

Real Estate

Ashika Tagore, Indore: I am a married woman and a single child. My father is no more. My mother is a homemaker and I need to provide for her. As of now, I give her cash for monthly expenses, which I will continue. I want to explore the reverse mortgage option so that she can get extra regular income. Will it be a viable option?

Adhil Shetty, CEO, BankBazaar.com: A reverse mortgage is an unconventional loan. You pledge your property to a lending institution. The loan amount is determined on the basis of property value and interest rate. The financial institution will pay your mother a monthly amount against the property. But you may not be able to inherit this property. You can, of course, repay the loan later to claim the property. Also, your mother needs to be 60 or above. The property should be her primary residence.

You must weigh all your options before going for this. Your mother may consider selling the house and moving into a smaller place. The money saved can be invested in options that can multiply the money and pay monthly income. 

Taxation

Tarun Kumar, Mumbai: My salary income is more than Rs 10 lakh. My office has made tax deductions as per the old tax regime for FY21. I want to opt for the new tax regime. Can I still do that?

Lionel Charles, CEO, IndiaFilings: Yes, taxpayers can opt for the tax regime any time before filing the return for the year. If the employer has already made tax computations/deductions, you can opt for the new system while filing the return. If tax payable under the new regime is less than what you have paid, you can claim a refund during ITR filing. -

Home loan

Ali Zafar, Lucknow: I started my home loan post-Covid at around 7 per cent interest rate. I will be taking tax exemption on the interest amount. Now, I am in a position to save an additional Rs 10,000 per month. Should I prepay the loan with additional money or invest in mutual funds that may give more than 10 per cent returns in the long run and then repay the loan after they appreciate? 

Rachit Chawla, CEO & Founder, Finway FSC: If you are certain you will continue saving Rs 10,000 in the long-term (next five years), then SIPs in mutual funds make sense, because markets are volatile. At the moment, markets are high, and may be in the next one or two years some incidents will happen and they will crash by 40 per cent. In that case, you should still be in a position to continue the SIP and at the same time save Rs 10,000 additionally. If you feel that this savings (Rs 10,000) might not be consistent and fluctuate with the volatility of the market, you should first repay the home loan and invest once you are debt-free so the volatility does not bother you.

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