pnb housing
February 26th, 2019

Things you should keep in mind while closing your home loan

Things you should keep in mind while closing your home loan

Once the final dues of your home loan are paid, you become a proud owner of a home. It is an exciting and emotional moment and a time for celebration. But, before you head on to celebrating, certain tasks in the home loan closure process need to be taken care off. Without these tasks the home loan closing process will be incomplete, which will lead to complications in the future.

Here are important points to keep in mind while home loan closure:

  • Collect all of your original documents from your lender
  • Ask your lender for a ‘No Dues’ certificate
  • Have the ‘Lien on Property’ removed
  • Get the updated ‘Non-Encumbrance Certificate’
  • Make sure your ‘Credit Records’ are updated

Below, we have briefly explained the points from the list provided above.

Collect your Original Documents

Make a list of all the original home loan documents you have submitted to your home loan provider. Once your loan is paid off, collect your original documents and map them with your list. These are important documents and should be handled carefully.

The list of documents submitted for a home loan in India includes:

  • Sale Deed
  • Title Deed
  • Loan Agreement
  • Power of Attorney
  • Collect submitted security cheques

While collecting these documents, make sure to assess their condition. Agreements with multiple pages should be checked thoroughly for missing or damaged pages.

Get a No Dues Certificate (NDC)

A No Dues Certificate, also known as NDC, states that you have paid your home loan and the lender has no rights on the property. The NDC is one of the most important documents in the home loan closure process and should be collected from your lender.

The NDC mentions the following critical details:

  • Property Address
  • Customer’s Name
  • Loan Account Number
  • Loan Amount
  • Start and End Date of Loan

A No Dues Certificate (NDC) will play a vital role if you ever plan on selling your property.

Remove LIEN on the property

LIEN allows a lender to possess rights on your property, until your debt is cleared, keeping you from selling the property. Hence, an essential part of the home loan closing process is to have the LIEN removed. You will have to visit a Registrar’s Office to get this done.

If the lender delays the process of removing the LIEN you can have it removed with the help of a NOC issued by the bank.

Check if Credit Score is updated

A good credit score matters a lot when you apply for a loan. Once you have paid your current home loan, your financial institution updates this information at CIBIL. If this information is not updated, you can face issues when you apply for another loan or make future transactions. Therefore it is crucial that you check for your updated credit score (the update may take around a month to reflect on your credit history).

Remember, repaying all your EMIs does not end your home loan closing process. You need to keep a check of all that we have mentioned above and complete the necessary process as it should be.

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