If you also want to close your home loan, then you should always keep some things in mind. Especially these 5 things, so that you do not suffer any loss, there are some rules related to hidden charges also. In such a situation, you will not be able to get the full benefit of closing the home loan. Read this news...
Home loan has made buying a house quite easy for all of us. Still, sometimes its monthly EMI seems heavy. Many times, despite having the money to repay the home loan in full before time, we are not able to repay it in full because we do not have the correct information. Because of this, most of the people make mistakes while repaying the home loan before time and end up causing loss to themselves. In such a situation, you can avoid losses by taking care of these 5 things.
Banks and NBFCs providing home loans provide their customers the facility to repay the loan in full before time. Financial institutions have different conditions for this. However, sometimes there are some conditions with 'hidden charges', and many such due to which you do not get any benefit of repaying the home loan before time.
Keep these 5 things in mind before closing a home loan
If you are going to close a home loan, then keep these 5 things in mind…
No foreclosure fees: Premature closure of home loan is called 'foreclosure' in technical term. Reserve Bank of India rules say that foreclosure fees cannot be charged on home loans where the interest rates are floating rate. Even if your home loan has a variable interest rate, no penalty can be charged on pre-mature loan closing. However, on fixed rate home loans, you have to pay foreclosure fee of 4 to 5 percent.
Inform the bank: Although not mandatory, whenever you are going to repay your home loan prematurely, inform your bank or NBFC 2 to 3 weeks in advance.
Take No Objection Certificate: If you have closed the home loan prematurely, then you should obtain 'No Objection Certificate' (NOC) from your bank or NBFC. Otherwise, it will appear as a liability in your CIBIL score and will spoil your score.
Get the mortgage status terminated: When you get your home loan terminated prematurely. At the same time, along with collecting all its papers from the bank, also get its 'Lien' status canceled. With this you will not face any problem in selling your property further.
Get the original papers: It has been seen many times when people close the home loan before time, but they do not get the original papers of the house from the bank. You have to ensure that you get the original papers of the house along with closing the home loan.
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