Here is how You can Transfer Your Home Loan
Jun 12, 2018 Home Loan
There are many reasons why a borrower wants to transfer his or her home loan. It could be due to some other banks offering a better interest rate or you as borrower want to increase your home loan tenure or if you want a top-up on your existing home loan but your present lender is not willing to offer it. However, while planning for the transfer of home loan; you should keep an eye on the interest rates that various lenders are offering and also various offers that the banks keep on offer from time to time.
Now let us understand the process of transferring a home loan.
You need to pay first to the existing lender so that it releases the original documents of the property as the new lender will not issue any cheque unless you give the original documents of the property to them. To come out of this situation you can ask your existing lender to issue a letter mentioning the list of property documents lying with them, outstanding loan amount and an undertaking that the bank will hand over the property related documents to the future lender only after the payment of the outstanding amount.
However, the new lender will also verify the customer and property details to check the title of the property, track record of the applicant, and repayment capability among others. The new lender also might not be willing to transfer the loan unless they are sure that you have a good credit score and good repayment history.
In order to transfer the home loan from one lender to another, you might have to pay some charges to both the lenders. Also, the borrower might have to pay some processing charges to the new lender which might vary from lender to lender from 0.2 percent to 0.75 percent along with depending on the applicant’s profile. But the applicant should remember that the processing fee is negotiable and you should bargain with the lender to minimise the amount.
Although the new lender might not charge you with anything for processing our balance transfer application but you might still have to pay the stamp duty and registration charges for the loan. In case the bank decide to do a fresh valuation of the property either for top-up loans or in case the property is not approved by the lender then you might have to pay the valuation charges as well.
Now let us understand the process of transferring a home loan.
You need to pay first to the existing lender so that it releases the original documents of the property as the new lender will not issue any cheque unless you give the original documents of the property to them. To come out of this situation you can ask your existing lender to issue a letter mentioning the list of property documents lying with them, outstanding loan amount and an undertaking that the bank will hand over the property related documents to the future lender only after the payment of the outstanding amount.
However, the new lender will also verify the customer and property details to check the title of the property, track record of the applicant, and repayment capability among others. The new lender also might not be willing to transfer the loan unless they are sure that you have a good credit score and good repayment history.
In order to transfer the home loan from one lender to another, you might have to pay some charges to both the lenders. Also, the borrower might have to pay some processing charges to the new lender which might vary from lender to lender from 0.2 percent to 0.75 percent along with depending on the applicant’s profile. But the applicant should remember that the processing fee is negotiable and you should bargain with the lender to minimise the amount.
Although the new lender might not charge you with anything for processing our balance transfer application but you might still have to pay the stamp duty and registration charges for the loan. In case the bank decide to do a fresh valuation of the property either for top-up loans or in case the property is not approved by the lender then you might have to pay the valuation charges as well.
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