I am sure the happiest day in your life is the day you pay the last EMI on the home loan, or the day you pre-pay the full outstanding balance on the home loan. Once you are done paying all EMI's on the home loan, you will be free of stress as a big burden will be lifted off your shoulders. In all this excitement, there are chances of you forgetting important things that need to be done after paying all the EMI's on your home loan. In this blog we will discuss the things that need to be done when you close the home loan.
Banks collect certain original documents to sanction the home loan. These documents include Sale Deed, Conveyance Deed, Possession Letter, Power of Attorney and so on. Make sure to collect all these documents once you close the home loan. You are supposed to have these documents while selling your house or availing a loan against property.
While sanctioning the home loan, banks make a list of original documents collected and give you a copy of this list. As soon as you close the home loan, collect all the documents from the bank and make sure no document is missing.
NOC or No Due Certificate is issued by the bank, after you repay your home loan in full. This states that the bank does not have any interest in the property. Every bank has to give a No Due Certificate (NOC) when a home loan is closed. So, do not forget to collect NOC from your bank after you close your home loan.
As soon as you close your home loan, your bank has to update the same with CIBIL. Usually, banks do not show much interest in updating CIBIL after the home loan is repaid. So, request the bank to update CIBIL regarding the closure of the account.
If the bank creates a lien on your property, it has the right to own and sell your property, in case you default on the home loan. Usually, banks create a lien if the credibility of the borrower is under question. Lien prevents the borrower from selling the property and it is registered with the registrar office.
As soon as you repay the home loan, check if the bank has put a lien on your property. In case bank has put a lien on your property, ask them to help remove the lien. If the lien is not removed, you won't be able to sell your property. By applying for a new encumbrance certificate you can check if the bank has removed the lien on your property.