Buying a home is everyone’s ultimate dream for which everyone works hard and ties a knot with a bank for a long term, pays EMI with an aim to finally own a home of your own. However, some choose to make a pre-payment and get rid of long term commitment. However, when do not do the fore-closure formalities appropriately; you can ruin your happiness instead, therefore read things that one must do while considering a home loan fore-closure.
- Obtain all the original documents from the bank: Once you have closed the loan, the bank should give back all the originals deposited at the time of sanctioning you the loan amount. Obtain Mother Deed and Title deed wherever applicable. Therefore keep a note of original documents you have deposited at the time of availing home loan. When your documents have been returned, just check that they are in good shape without any torn or missing pages in it, before you sign on the acknowledgement letter to the bank. Try and visit bank you borrowed loan from to obtain the documents rather than trying to obtain the same through courier. Once you have obtained your originals, scan and keep the originals in a folder.
- Get “No Objection Certificate” from the bank: A “No Objection Certificate” from the bank will state that you have cleared your loan, and therefore it has no more interest in the property. When you are obtaining a No Objection Certificate from the bank you need to ensure that all the details regarding your home loan such as home loan account number, your name, address of your home, date of loan disbursal, date of loan closure, amount borrowed and repaid are mentioned in the No Objection Certificate. The bank should also clearly mention that there is no more loan due on the bank.
- Get the Lien removed on your Home from the Registrar office: There are cases where the bank creates a lien in registrar office which prohibits the borrower from selling the property. In cases where the bank has put a lien you need to get the lien removed to be able to be able to sell the property. It is always sane to do it immediately after you clear your loan.
- Get your Credit History/ Credit Score updated: Once you have paid your loan successfully, you should also update your credit rating organization such as Experian, Cibil, Credit Clear, etc. Once this is done you credit score will be enhanced and you will comfortably be able to borrow more loan if you wish.
- Obtain a Legal Clearance Certificate from your Lawyer: Obtaining a legal clearance certificate through a reputed lawyer will ensure that your home loan closure procedure is complete. And if you are planning to sell the house it will be a lot easier and quicker.
- Obtain detailed statements of the payments made to the bank: Having a track record of all the payments will ensure that you will have all solid proofs to prove that you have make entire payments at any point of time. And also if you have made a pre-payment or fore-closure it will recorded and reflect in a positive manner.
- Obtain Encumbrance Certificate from Registrar Office: Once you have obtained a No Objection Certificate from the bank and get the lien removed you need to apply for an Encumbrance Certificate at Registrar Office. The Encumbrance Certificate is a copy of financial transactions taken place on the property.