You don’t just need a checklist for taking a home loan. You also need a comprehensive checklist when you close the home loan. To recap, when you took the loan, you gave the original titles to the property to the bank and once the loan is over you need to get it back. Also, in the records your property is under lien and you need to get that removed.
Now that your loan is about to get over, your big challenge is to work out how to finish home loan faster in terms of the entire process flow. There is an elaborate home loan closing process and as the rightful owner of the property, you must go through these steps very carefully.
Get All the Original Papers from The Bank
This is the first step. You had given the original property documents to the bank as security against your home loan. Now that your loan is completed, you need to give a letter to the bank requesting for the documents to be returned. Send copies of the statement of payments and the bank will verify the records and then let you know if there are any administrative charges pending.
Once the bank is clear there are no dues, they will hand over all the necessary documents back to you. This includes, title deed, sale deed, loan agreement, POA (power of attorney), link documents, etc. As per extant regulations, lender must return all property documents to the owner within 15 days from closure of the loan.
Collect The No Dues Certificate from The Bank
Once you have got all the documents back from the bank, the next step is to get a stamped no-dues certificate from the bank stating that the said home loan has been closed and all charges have been paid. This Certificate is an official confirmation from the bank that you have fully repaid the loan and the lender no longer has any legal claim to the property.
At this stage, you are required to verify the details in the no dues certificate like the Name, Property address, Loan amount, Loan Account Number, starting and closing date etc. In the case of any discrepancy, you must bring it to the notice of the bank immediately.
Get The Property Lien Removed at The Registrar Office
When the bank gives you home loan, the lender has a lien (or first right) over the property. However, such lien is valid only till the loan is fully repaid. As long as there is a lien, the said property cannot be sold. once the loan is repaid, the banks does not need the lien.
This has to be done by you by visiting the registrar office. Once the home loan is fully repaid, the bank gives back the documents and also hands over the no dues certificate. With these documents, you can make an application to the registrar office to remove the lien. Once the lien is removed, you are full and final owner of the property.
Get Updated No-Encumbrance Certificate and Update Link Documents
The Non-Encumbrance Certificate of property has detailed information and audit trail of all transactions pertaining to the property, including sale, lease, pledge etc. When the home loan is being repaid, the Certificate shows an outstanding loan on the property. However, once the loan is closed, and the lien is removed, then there are no encumbrances left on the property and you have unfettered rights to the property.
You can get this done at the sub-registrar office and get the encumbrance certificate updated by giving them a copy of the no-dues certificate issued by the bank. This completes the loop.
Take The Initiative and Update the Credit Score
Normally, when the loan is repaid, the bank will intimate the agencies like CIBIL about your loan closure and the agencies will update your score accordingly. In reality, the banks are stressed for time and manpower and such actions get delayed. Hence, you may find that your credit score has not been updated and home loan is still showing as outstanding.
You can take it upon yourself. Visit the credit bureau with the documents and ensure that it is updated. That way, it normally works out much quicker and is also more efficient, since it is your credit report after all.
To sum it up, how to finish home loan faster is about you taking the initiatives and making a few trips yourself to the bank, registrar office and to the credit bureau. This is part of the entire home loan closing process and you have to take that extra effort to make things smooth. It is worth the trouble, because it is your property after all.