From obtaining a No Objection Certificate to getting back all your original documents, make sure you tie up all the loose ends after paying the last EMI on your home loan
By Ratan Chaudhary
Home loan helps most individuals achieve their goal of owning a home. But the real joy of being a home owner is often realised when you complete repayment of the home loan. Once you complete repayment of your home loan, make sure you take the following steps to avoid any complications in the future.
Obtain NOC from lender
Obtain NOC (or NDC, i.e., no dues certificate) from the lender as soon as you repay the home loan. This document certifies that you have repaid the loan in full and no dues are outstanding against your name and loan account.
While obtaining NOC, make sure all the relevant details are mentioned and also spelt correctly, including name of the borrower, loan account number, details of property against which loan was taken, date of loan closure, etc.
NOC must also clearly state that the property solely belongs to you and the lender no longer has any authority over the property.
Recover original documents
Make sure you recover original documents from the lender once you pay off your home loan dues. The lender generally provides you a list of documents, also referred as LOD, which is submitted while applying for loan. Make sure you cross-check all the original documents with this LOD and retrieve them after closing the loan. LOD usually include bank account statements, income proof, property papers, deed of sale, possession letter, etc. Check that documents are in good condition, not misplaced, and pages are not torn. As some lenders take security cheques while disbursing home loan, remember to retrieve those as well.
Lien termination from registrar
Lenders often put a lien against your property in case they are unsure about your repayment capacity. Doing so would empower the lender to sell the property for recovering outstanding dues in case you default on your loan. In addition to this, the lien also refrains the borrower from selling the property until the loan is closed. Make sure you remove this lien from your city’s local registrar office as soon as you repay the loan, in order to avoid legal issues or complications in property ownership. While approving your request for lien termination, the registrar may require NOC certificate from the lender, and then discharge the release deed.
Obtain updated No Encumbrance Certificate
Encumbrance Certificate is a legal document containing detailed records of all your financial transactions related to the property mortgaged for home loan. So when you close your home loan, this certificate must reflect that the loan has been repaid in full. Procuring this document from the sub-registrar’s office would certify that your property is free from any legal or monetary liabilities. This comes handy in case you wish to sell off your property anytime post closure of the home loan.
Update loan closure in credit bureau’s database
Lenders are usually quite proactive in informing credit bureaus whenever you apply for a loan or credit card. However, when it comes to updating your credit report on loan closure, you may have to remind and follow up with the lender until it reflects in your credit report.
The writer is head of home loans, Paisabazaar.com