Paid Your Home Loan Completely? Here’s What to Do Next
Availing a Home Loan to buy your dream home is a satisfying experience. Repaying the loan in its entirety is an exhilarating experience. It gives tremendous joy to have your dream home free from all encumbrances. On repaying the Home Loan entirely, you have to ensure the completion of various formalities. We shall list them out for you.
· Obtain the Loan Closure Letter
On closing the Home Loan, the first thing you should do is to obtain the statement of the loan account that indicates the closure of the loan. A certificate from the bank that you have closed the Home Loan account is also necessary.You will need this letter later on for various purposes.
· Obtain the Original Documents Deposited with the Bank
Apply to the bank and seek the release of the original title documents of your property. The banks will need some time to accede to your requests. It is because some banks keep the original documents in safe custody at a centralised location. Not all banks have facilities for keeping the documents in the branch premises.
While receiving the set of original documents, check whether all pages of the original sale deed is available. You can do this easily because every page of the sale deed will have details of the page number as well as the total number of pages in the deed. Missing out a single page can cause problems later on. The bank will not be in a position to help at a later stage.
You must have created the equitable mortgage. Therefore, you have the copy of the list of documents you have submitted to the bank. Cross check the documents with this list and ensure that you receive every single document from the bank. The bank does not need any document in connection with your loan or property now.
· Get the Equitable Mortgage Cancelled at the Sub Registrar’s Office
Contact your bank and arrange to cancel the bank’s charge over the property at the Sub Registrar’s office. The bank official will have to approach the Sub Registrar and register the cancellation of the equitable mortgage. It will enable the Sub Registrar’s office to remove the bank’s charge thereby ensuring that you have a complete right over the property. The procedure requires you to incur some expenses. However, it is better to complete the process as quickly as possible. It is because you cannot deal with the property in any manner as long as the bank has its charge over the security.
· Get the NOC from the Bank
Usually, the Sub Registrar will not cancel the equitable mortgage without the bank providing the NOC. However, it is better to apply to the bank and seek a separate NOC stating the following details:
- The loan account details along with account number, sanctioned amount, and date
- The date on which you have closed the loan
- The details of the property provided by you as security for the loan
- The details of the original title deed deposited with the bank
- It should also contain the words “the bank does not have any objection in transferring the title back to the owner” or words to similar effect.
· Collect the Post-dated Cheques or Cancel the ECS Mandate
You might have submitted post-dated cheques or provided an Electronic Clearance Service (ECS) mandate to facilitate recovery of the Home Loan. Since you have closed the Home Loan, these documents do not have any significance. It is better to collect them from the bank. You should also ensure that the bank cancels the ECS mandate, primarily if you service the instalments through a different bank account. Submit the ECS cancellation mandate to the bank from where you make the repayment of the Home Loan and ensure to cancel it in their records.
· Get a Legal Clearance Certificate
Contact a reputed lawyer to search the records in the Sub Registrar’s office and obtain the report. The search report will document the details of the creation and cancellation of the equitable mortgage. It is an optional document, but it is better to have one on record.
· Obtain the Latest Encumbrance Certificate
The latest encumbrance certificate is vital. It is proof that the property indeed belongs to you now, and you are free to deal with it in the manner you like. It is handy when you wish to sell your home. You need this certificate even when you search for Home Loan Best Offers for repairs and renovations and other purposes.
We have seen the seven critical steps you have to take on closing your Home Loan completely.
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