The availing of homeloan is a big task and once it is sanctioned, the people start feeling the heat of interest rates. Although, the interest rate, processing charges and other expenses on a homeloan makes a person review his or her decision of lending this financial funding from a particular bank or other institution.
Some people face issues with their homeloan repayment and other details. Also, the regular availability of lower interest rates from different banks and other institutions attract people and thus make you feel like to transfer the homeloan from one bank to another.
So, here are the lists of things you must remember while transferring your home loan.
- Reasons for Transferring Homeloan
Firstly, you must have clear and appropriate reasons to transfer a homeloan because this money matter includes your property papers and other legal hurdles that almost everyone has to clear before they get a loan sanctioned from a bank. So, think wisely before finalizing the decision of transferring a homeloan. Like many people wish to expand homeloan repayment tenure, some wish to deposit Lumpsum amount while demonizing their EMIs and also wish to pay a lesser interest rate on homeloan which other banking or financial funding institutions offer.
So, take a glance at a valid reason before heading to transfer a homeloan.
- The Process of Transferring Homeloan
Make sure you pay all outstanding dues with the current homeloan lender as the bank or the financial fund provider will relieve your property documents only after getting the dues clear. This is also important because the new lender will not issue a single cheque in your name before acquiring the property papers.
So, ask your current fund provider to issue a letter to the future homeloan lender. This written request must include the list of property documents which is in custody of the current homeloan lender, the outstanding payment to the same, and an undertaking that the bank will release the custody of all documents and will handover it to the future homeloan lender as soon as the person clear all the dues.
After which, the new lender will carry out the verification process about the person seeking homeloan and will make sure to check if the person is in condition to payback the homeloan amount or not. Also, the lender has the right to cancel your application for homeloan transfer in case you fail to fit in the criteria for the same.
- Charges Applicable for Homeloan Transfer
The banks and other financial fund providers are not allowed to impose prepayment charges on the homeloan with floating interest rate. But it is reversed in case of a homeloan with fixed interest rate and here also the person can avail wave-off for the same if he or she prepays the homeloan amount from own funds. This means that if you clear dues of a homeloan without taking another loan then you can enjoy relaxation in the prepayment charges.
But, the homeloan borrower has to make payment of processing fee to the new lender which varies from 0.2 percent to 0.75 percent. Remember that this amount can be minimized as you have the option to bargain with the lender on this issue.
But, you have to pay the charges for stamp duty, valuation charges, and registration charges for a mortgage.
Take these points into consideration as you look for transferring homeloan from one bank to another.