While owning a house is a dream of most of us, not everyone is fortunate enough to have sufficient funds to buy it. Those who can’t arrange enough funds, rely on home loans from banks to fulfill that dream. Home loans enable people to buy their dream house and pay for it over a period of time through EMI’s. Many people believe that their home loan is closed with the payment of last EMI. But that is not the case. Paying last EMI is the first step in closing a home loan. Closing home loan is as important as availing a home loan. If you have completed all your home loan EMI’s, then you have to start working for its closure now to avoid facing trouble in future. Read on to find out 6 things that you should remember while closing home loan.
6 Things To Remember While Closing Home Loan
Home loan closure is not a tedious task. You just have to take care of following steps while closing home loan.
1. Get Your Original Documents
While availing a home loan, borrowers are required to submit their original documents such as title paper, contract and indemnity to the lender. Request the lender to return all the documents after closure of home loan. Don’t rely on the bank to return those documents to you. It is advisable to visit the bank on your own and take your original documents back.
2. Obtain NOC
An NOC or No Objection Certificate is a document issued by the lender stating that the loan has been completely paid off and there is no outstanding amount to be paid by the customer as on a specific date. If the lender later claims that the borrower has pending dues, the borrower can produce the NOC at that time. It is an important document to collect from the lender while closing home loan. It will save you from getting into trouble in future. Due to its importance, it is advisable to retrieve the NOC in person instead of asking for it through post.
3. Take Back Security Cheques
Banks also require borrowers to deposit some security cheques at the time of availing home loan. Don’t forget to take those security cheques, once you have completely paid your home loan.
4. Update CIBIL Database
Make sure that the lender has informed CIBIL about closure of your home loan. You can request the bank in written to do so. This updation process usually takes around 30 days. Follow up with the bank after 30 days if they don’t inform you about your CIBIL update status. Once the CIBIL database is updated, you can apply to get your CIBIL report to make sure it reflects in new score.
Check out 5 tips to maintain your CIBIL score here.
5. Obtain EC (Encumbrance Certificate)
An EC or Encumbrance Certificate is a document that lists all the financial transactions on your property. Make sure you obtain an EC reflecting closure of your home loan.
6. Remove Lien
If the lender is doubtful of borrower’s credibility, he may put a lien on the property. Until the lien is removed, the borrower can’t sell the property. Check with the bank to know if it has put lien on your property. If yes, then it is advisable to get the lien removed from Registrar office on closure of home loan.
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