Important factors to keep in mind when closing your Home Loan

Millions of Indians are able to fulfil their dream of owning a home thanks to the easy availability of home finance. Closing a home loan and paying off the last EMI is one of the proudest days for a homeowner. While the financial obligation is complete, some processes are still to be followed to ensure hassle-free homeownership for you and your beneficiaries in the future

Here are four essential checks you must perform to safeguard your property and financial interests.

1. Request for your original documents

At the time of processing a home loan, the bank keeps all original documents such as the sale deed, property registration and conveyance, any agreements with the developer, letter of possession, etc. Keep a duplicate set of records for yourself, and at the time of closing the loan request for all the originals back. Ensure everything is in order before closing your home loan. If there is any damage or documents misplaced, bring them to the bank’s attention immediately. 

2. Obtain no-dues certificates

A No Objection Certificate (NOC) from the bank acknowledges that you have paid all required dues. This is a crucial document that can be produced in case of any dispute later. Similarly, a nil-Encumbrance Certificate (EC) documents all the financial transactions related to the property, helpful for sound tax management. These documents show that the property is free of any issues and give you clear title ownership if you wish to sell the asset in the future. Make sure you obtain both these certificates from the financial institution you took the home loan from. 

3. Confirm termination of lien

Banks may sometimes mark a lien or attach the property as collateral for the loan. This is usually done if the bank is unsure about the credibility of the borrower. If a lien has been marked on your property, you will have to visit the local property Registrar’s office to get the lien removed. However, you will need the bank’s NOC to get this done. It is not possible to sell your asset without the lien being terminated. Hence, confirmation of lien termination should be taken care of as a priority.

4. Have your credit data updated

Successful repayment of a home loan drives a significantly positive impact on your credit data. Not only does your credit score improve, but it also brings down your debt ratio. This makes it possible to get additional loans in the future at attractive interest rates, gives you more negotiation power, offers a better chance of credit card approval, better insurance rates, and more. It usually takes about a month for the changes to reflect in your credit data. However, if the bank has not initiated the changes in this period, you should bring it to their notice. Once the data is up to date, you can apply to get a credit report and see what your new credit information looks like.

Wrapping up

It bodes well to start all the closing formalities as soon as you have paid off your last EMI on your mortgage. While closing a home loan involves a process of its own, what makes it easier is opting for a good lender. As a home loan is a commitment for many years, ensure you choose the right lending partner and opt for a loan that fits your unique needs. IDFC FIRST Bank Home Loan offers customised loans, simple documentation and end-to-end digitised services to ensure a swift and hassle-free experience – from application to closure. 

Make your dreams of becoming a homeowner come true with IDFC FIRST Bank today!

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.