A home loan is a long term commitment. With increasing cost of homes, the EMIs are getting bigger too. We understand how much joy closing a home loan would bring to you as it marks the end of those big fat EMIs and the beginning of absolute ownership of your home.
You may decide to pay a home loan all through its original term or decide to pre-close the loan much earlier. Whichever be the scenario, when you close your home loan, there are a few associated tasks that you should not miss out on.
We would advise you to just hold on to that sigh of relief for a little longer till you finish these tasks which are as important as closing your home loan.
Collection of All Original Documents From Your Lender
While availing your loan, you would have submitted all original documents pertaining to your property as a security to your lender. These may be the original sale deed, title deed, loan agreement, power of attorney (if any) and agreement to sale, etc. These are important documents that shows your ownership of the property. Make sure to collected them from bank and also it is good to ensure that there are in good condition too.
This should also include all those Post Dated Cheques collected by the lender from you at the time of sanctioning the loan.
Get A No Dues Certificate From Your Lender
A No Dues Certificate, as the name suggests is a document that certifies that there are no outstanding dues from your end to your lender. This is an important document that you should get from any lender after you close your loan. A NDC should mention all the loan particulars like the amount borrowed, property details, the date when the final payment was made, etc and should clearly state that the you have paid back the loan and there are no further dues payable from your end.
This is absolutely essential for you to possess this certificate to avoid any kind of dispute at a later date.
Ensure The Lien On The Property (If Any) is Removed
Some lenders may have created a lien on the property if they have doubts on the timely clearance of the loan from your end. With a lien, a property cannot be sold. To cancel a lien on the property you would need to make a visit to the Registrar’s Office and someone from the lender’s side would have to request the property to be made lien free.
Obtain the Updated Encumbrance Certificate
An Encumbrance Certificate is a record of all financial transactions done in relation to your property. When you close your home loan, you would need to get an updated Encumbrance Certificate reflecting the repayment of the loan.
Check if Your Credit Records are Updated
Every detail about your loan right from the application to its approval, your payments or defaults on EMI repayment and the closure of the loan are reported by your lender to the credit bureaus. These actions go on the calculation of your credit score. So when you make full and final payment on your home loans, make sure your lender reports this accurately to the credit bureau.
It is important that you pay equal attention to completing all these tasks in addition to closing the home loan so that you don’t face any problems at a later date.