Buying your first home is a dream come true moment and you experience an overwhelming relief and happiness once you have paid the last installment. Now, proud owners of a new home/property, you can enjoy your absolute ownership. Before you sit back in your lounging chair to enjoy your cup of tea you still need to take care of some details. Let us talk about the steps that you need to keep in mind before you can consider your home loan issue closed.
The following steps will protect you from any unforeseen complications in the future:
Once all your debts are cleared from the bank, you need to ensure that you get all the original documents, including the mother deed, conveyance deed, power of attorney, possession letter, builder buyer agreement, and sales deed. Ensure that all the documents given to the bank are returned and are in proper order. In some cases, the banks may have your cheques, for security purposes, ask for them as well, as the bank won’t need them anymore. Bring it to the notice of the lender if you feel that some documents are missing.
There are instances where the banks have lost the original documents, and in that case, you are eligible for compensation from the bank. There has been a case where a bank was penalised by the Maharashtra State Consumer Disputes Redressal Commission for losing the original documents of the property. The commission ordered the bank to pay a compensation of 1.15 lakh and return the documents within three months. Failure to do so, the bank was ordered to pay 50,000 as monthly compensation.
After the full repayment of the loan, you need to get a NOC or NDC (No dues certificate). This document certifies that you have paid in full , and have no outstanding dues against your name or your loan account. While getting the NOC, don’t forget to check for all the details, such as your name, property details, closure date, among others . Make certain that the property belongs to you and that the lender does not have any authority over it. .
Banks want to secure their position in case the borrower doesn’t pay on time. In this case, they put a lien against your property. This document will allow the bank to sell the property in case you default on your loans. Until the loan is closed, the lien also abstains the borrower from selling the property.
Once you finish with your repayments, make sure you remove the lien from the city registrar. This will help avoid any legal issues or complications in the ownership of the property. To get the lien against your property removed, the lender may require the NOC from the lenders. Removal of the lien may take up to 10 days.
The first thing the lender does when you apply for a loan is to inform the credit bureaus. But you may check with the lender to follow up with credit bureaus until it reflects on your credit reports. If your score is not updated, there is a risk of you not being considered for another loan or a lower interest rate. The credit score is also a crucial indicator of your repayment capacity. It normally takes 20-30 days for the credit score to be updated, after the full repayment.
A legal document that contains the records of the financial transactions related to the mortgaged property for a home loan is the encumbrance certificate. So, when you close your home loan, make sure that this certificate should reflect full loan repayment. Getting this document from the sub-registrar office will certify that the property is free from monetary or legal liabilities. The certificate may prove useful if and when you wish to sell your property in the future.
(The writer is co-founder and CEO at BASIC Home Loan. Views expressed are personal)
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