There is nothing more overwhelming than paying your entire home loan and becoming a proud homeowner. And while you are celebrating the end of your home loan EMIs, you must understand all aspects of home loan closure. A home loan is not considered closed unless your lender declares the same, and therefore, we have curated a checklist that you must mark off to ensure your home loan closure and avoid any future complications.
Collection of all original documents –
What documents are collected after home loan closing?
First and foremost, make sure to collect all the original documents you provided the lender while availing a home loan. Some of these documents may include:
- Sale Deed
- Title Deed
- Loan Agreement
- Power of Attorney, and more
Also, make sure that when you collect the documents, they are in good condition. You must also check the agreements with multiple pages for any missing or damaged pages. In case a document is missing, ask your lender to provide the same.
Obtaining The “No Dues” Certificate
A ‘No Dues Certificate’ or NDC is one of the most important documents that need to be collected after repayment of the loan. A No Dues Certificate states that there are no pending dues from your side, and the lender does not have any rights to claim the property. The NDC must mention details such as the property’s address, customer names, loan account number, loan amount and the date of starting and closure of the loan. It is advisable that you must make copies of NDC (both hard and soft) to ensure smooth dealings in the future. An NDC plays a vital role if you wish to sell your property.
Removal of Lien on the Property
A Lien gives the lender the rights on your property unless all the debt has been cleared. Lien also prevents you from selling the property. Therefore, lien removal is important in the home loan closure process. To accomplish this task, you will have to visit a registrar’s office accompanied by an officer from the lender’s side.
Obtaining the Updated Non-Encumbrance Certificate
A Non-Encumbrance Certificate is a legal document containing detailed records of all the financial transactions related to the property. Once your home loan has been settled, the Non-Encumbrance Certificate must reflect the same.
Read: What is Encumbrance Certificate?
Credit Score Updation
Your credit records must be updated post loan payment. Updation of credit score takes around 20 -30 days. Therefore, make sure that you obtain a credit report and also cross-check it for updation. In case your credit score has not been changed, talk to your lender about the same.
Obtaining Bank Statements Related to Loan Repayment
It is critical to get all loan repayment statements from the bank to avoid any future issues. Keep in mind that if you do not receive all of the statements from the bank after repaying the loan, the loan is not yet complete.
Collecting all the post-dated cheques
Most banks require applicants to provide post-dated cheques when applying for a house loan if any monthly EMIs are missed. If you have not missed any EMIs, you must collect those post-dated cheques from the bank once the house loan has been repaid.
Word Of Advice For The Borrowers
Home loan closure is as crucial as any other aspect related to home loans. Therefore, it is important to settle the records and have them updated on time. All the steps mentioned above must be taken care of for complete home loan closure.