Closing Home Loan successfully would be considered priority because failing to make your repayments could result in you losing your home. A borrower has to be very cautious while closing home loan as the process of closing home loan is as cumbersome as applying for fresh Home loan. While applying for home loan you have to do homework on interest rate and tenure of home loan etc. The only difference in closing home loan is that your lender or banks will handover you the documents stating that you do not have any outstanding dues.

Process of Closing Home Loan

The closing home loan is that final step that means you are very close to having a home to call your own and your biggest liability is off your head. Following are some important process involved in closing home loan.

* Get in touch with Bank: Before you go for closing your Home loan, get in touch with Bank and see what all charges they are going to levy in case you are closing it before the normal maturity. It doesn’t matter even if you have repaid the principal and the interest component of the loan regularly, if you default these additional charges, then the bank terms you a defaulter.

* Prepayment: In the case of prepayment of a loan, you need to start the entire process with a request to find out the outstanding amount, followed by one stating your inclination to pay the entire amount by a particular date. If prepayment of home loan is made from your own resource, banks do not levy a prepayment fee.

* Full and Final Settlement: When you close the loan, ascertain penalties for delayed payment or cheque bounced for some reason. Get in touch with your lending company and get details of penalty or outstanding amount. Make note of these additional charges and pay the final settlement.

* Get No due certificate: No due Certificate is a written certificate from the lender, stating that you do not have any outstanding dues on your housing loan. After the payment of all dues (Principal, interest and Penalty if any), No Due Certificate is issued by bank or lending company.

* Letter to the bank: If you have paid off the last EMI and all the outstanding payments have been made, you need to write a letter to the bank stating the facts and asking for the return of the original documents that you submitted at the time of taking the loan.

* Document Handover: The bank has to follow up with the registrar to get all the required documents for the termination of the loan. When you close the loan, you get back all the documents that you submit at the time of loan application.

Closing a home loan is a document-heavy process and you have to get in touch with your bank or lending company for smooth closing of home loan. Banks and financial institutes are happy to assist you in ascertaining dues or additional charges and ensuring all your documents relating to property is in order. While applying for home loan, an acknowledgment of the number of documents is given by lender to borrower. Ensure your bank or lending company handovers all your documents. You should collect all the documents within 10 days from the date of the repayment of the loan. This is best from the bank as well as the borrower’s points of view.

The ‘title of deeds’ of your home or apartment is vital and is essential if you want to sell your property. Any prospective buyer looks at title deeds to confirm if the land is in your name and if you have the full right to sell it.



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