7 Things to do when Closing your Home Loan
Home loan closure process can be straining for many people. But it’s also extremely important to take all the necessary steps and avoid future complications. For a successful home loan closure, follow these 7 steps.
1) Get all the original documents back: After you have made all your payments, your lender is most likely to return your original documents to you. However, you should check whether the lender has given you every piece of document you submitted. Also, ensure that all the pages of the documents are intact prior to signing the acknowledgement for the same.
2) Get a No Objection Certificate: It’s a clearance certificate from the lender stating that the borrower has paid all his dues and it’s cleared by the bank after removal of all hypothecation. Check for accurate details on the NOC such as address, your name, home loan account number, loan starting and closing dates, amount borrowed, etc..
3) Remove lien from Registrar Office: Some lenders create a lien at the time of loan disbursal. And if it’s not removed after closing the home loan, you will not be able to sell the property ever. If the lender doesn’t accompany you to the Registrar Office, you can remove it yourself by showing the NOC. It takes about 7-10 days to come in effect after removing the lien.
4) CIBIL Credit Update: Request your lender to update CIBIL with your details regarding home loan closure. Once the lender updates it, you can get the CIBIL report yourself to ensure that the changes are reflected in your credit score, but do so after a month as sometimes, it takes that long for CIBIL to update info.
5) Get legal clearance certificate from lawyer: A legal clearance from a credible lawyer is a healthy practice, but not mandatory. This helps in speeding up the process if someday, you decide to sell the property. Moreover, it assists in settling legal disputes regarding home loan completion procedure, if any.
6) Get a detailed record of loan repayments: It’s a good thing to keep a record of your bank statement reflecting your home loan EMIs. For those who made prepayments, it’s recommended to keep a photocopy of the cheques or demand drafts.
7) Receive an Encumbrance Certificate: You can apply in the Registrar Office for an EC, which is a documentation of all financial transactions made on the property. The home loan closure will only be complete when it reflects on the EC.