After years of regular EMI payments comes the time when you can finally become a proud homeowner. Naturally, your excitement knows no bounds! But while you might be tempted to relax, you still need to see through the home loan closure procedureto avoid any setbacks in the future. It is an important step that will allow you to gain full ownership of your house without any complications.
Here are five tips on how to close your home loan successfully.
1. Obtain a non-objection/no-dues certificate
Once you’ve repaid your loan in full, make sure to request a no-objection certificate from your lender. This certificate essentially serves as legal proof that you have paid back all the loan EMIs and there are no outstanding dues in your name. It also states that the lender has no right over the property, and you have complete ownership.
Besides collecting the NOC certificate, verify if the details mentioned in it are correct. These include:
- Your name and account number
- Communication address
- Details of the property against which credit was taken
- Date of loan disbursal
- Date of loan closure
If there are any discrepancies, raise a grievance immediately.
2. Recover original documents of your property
When you apply for a loan, lenders typically provide you with a list of documents that you need to submit. At the time of home loan closure, make sure to retrieve all the documents and cross-check against the list. Some of these documents include:
- Sale deed
- Title deed
- Loan agreement
- Transfer deed
- Allotment letter
- Power of attorney
Also, ensure that all the documents are intact and nothing is missing.
Additional Read: What are the current home loan interest rates?
3. Terminate the lien on the property
Lenders usually put a lien against the property you’re purchasing to secure the loan. Put simply, the lien gives lenders a legal claim over your property and a hedge against possible EMI defaults. This is why when you close the loan, make sure to terminate the lien from the registrar’s office to avoid any complications in the future.
4. Get the non-encumbrance certificate
The encumbrance certificate is legal proof that your property is free of legal liabilities and has no further debt. It contains all the financial transactions linked with the property mortgaged and reflects the full repayment of the loan. This document, therefore, will prove especially valuable if you ever sell your property in the future.
So, make sure you collect the certificate from the sub-registrar’s office when your tenure is over.
5. Verify your credit score
Once you complete the home loan closure process, check if the lender has updated your credit score. If not, you should ask for the needful as soon as possible. Since a good credit score is essential for securing loans, make sure it is updated within 30 days of loan closure. Also, in case of a delay, keep following up with your lender to ensure your records are updated on time.
Additional Read: Trends in India’s Home Loan Market
And, that’s it! Keep the five tips mentioned above handy, and you can avoid any complications at the time of loan closure.
If you’re looking for affordable housing finance, apply for a loan with Tata Capital and enjoy benefits like competitive home loan interest rates, easy repayment options, and convenient loan tenure.