The entire process to own a home is not easy and then keeping the same mortgage is the most heart-breaking thing. But, certain situations like outstanding dues, non-payment of EMIs and other financial crisis make it happen. However, no one should face this situation but we suggest you know all about selling a mortgaged property in India.
- Clearing pending dues in one go
We all know that the property documents are in the bank custody until the loan payment is not completed. So, here the buyer can, however, use his/her savings as a down payment after which the bank will release all the property documents along with NOC that states the property is free from all kind of dues. This is the first method to sell the mortgaged property.
- When buyer avail loan from seller’s bank
In this case, a tripartite agreement is made as there are three parties including the buyer, the seller and the lender. Here the bank [lender] assesses the buyer’s repayment ability in order to consider the amount of loan to be offered. After which the loan is sanctioned and the remaining amount from this loan is transferred to the seller.
- When the buyer avail loan from different bank
In this case, the seller asks the bank to release a certificate related to the remaining loan amount along with the list of property documents in their custody. After which the bank settles the outstanding home loan and releases the papers. These documents are forwarded to the buyer’s bank that sanctions the loan accordingly by evaluating the property value.
Remember, the new home loan on the same property will be approved only if the old loan is cleared. In case of availing home loan on a mortgaged property then it is mandatory for both the seller and the buyer to submit their salary slips, bank account statements, Form 16A, 16B and a copy of sale deed. The seller is required to apply for foreclosure in his bank.
- List of Documents required for selling a mortgaged property:
- Sale Deed
- Home Loan documents
- No-Objection Certificate from the society
- Encumbrance Certificate
- Property tax receipts
- Consent from the co-owners