7 Must Do Things on Home Loan Prepayment and Closure Procedure and Home Loan Documents Required

7/26/2019 7 Must Do Things on Home Loan Prepayment and Closure Procedure and Home Loan Documents Required

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SBI Housing Loan and Documents RequiredSBI Housing Loanbecomes the most demanding home loanacross thebanking

sector in Indiaand you will never regret if you have taken housing loanfrom State

Bank Of India(link is external). Other banks have very attractive offers for housing

loan, once you have availed one of those home loans, there will be a day that you realize

"I could have at least gone through the details of !I housing loan".

here is a saying among the home loan takers "#$to loan sanctioning, other banks are

good% after sanctioning, !I is good". It is really true when hidden charges and $enalties

come into force during the re$ayment $eriod of other banks. &ere we look into

the features, eligibility requirements, loan amount

disbursementt,documents required, etc. of !I &ome 'oan. ou may read !I

&ome 'oan *+for clarification related to this financial $roduct.
http://www.lopol.org/article/banking-institutions-in-indiahttp://www.lopol.org/article/banking-institutions-in-indiahttp://www.lopol.org/articles/bank-home-loanhttps://www.statebankofindia.com/https://www.statebankofindia.com/https://www.statebankofindia.com/http://www.lopol.org/article/bank-loan-sbi-home-loan-faqhttp://www.lopol.org/article/bank-loan-sbi-home-loan-faqhttp://www.lopol.org/articles/bank-home-loanhttps://www.statebankofindia.com/https://www.statebankofindia.com/http://www.lopol.org/article/bank-loan-sbi-home-loan-faqhttp://www.lopol.org/article/bank-loan-sbi-home-loan-faqhttp://www.lopol.org/article/banking-institutions-in-indiahttp://www.lopol.org/article/banking-institutions-in-india


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SBI Housing Loan FeaturesPurpose of SBI Housing Loan

urchase a $lot of land (link is external)for $ur$ose of construction of house

urchase - construct anew house - flat (link is external)

urchase an existing (old) house - flat or extend an existing house (link is

external)

e$air or renovate an existing house - flat

urnishings - consumer durables as $art of the $ro/ect cost

eimbursement of investment made from own resources during the $receding

twelve months for $urchase -construction -re$airs -extension of house

'oans for more than one house may be granted to an individual $rovided he - she fulfills

the income criteria as also 01I - 21I ratio after netting off the re$ayment obligations

of the existing loans and sub/ect to satisfactory conduct of existing loan(s) for aminimum $eriod of one year.

akeover of !I &ome 'oans availed by an individual borrower from other banks -

financial institutions may be considered under certain circumstances after strictly

following the $rocedure laid down.

Eligibility for SBI Home Loan Minimum age:Individual(s) over 34 years of age with steady source of income,

including $ersons engaged inagriculture 5 allied activities (link is external).

Maimum !ge:1aximum age limit for a &ome 'oan borrower is fixed at 67

years, i.e. the age by which the loan should be fully re$aid, sub/ect to availability of

sufficient, regular and continuous source of income for servicing the loan re$ayment.

anctioning authority is, however, left with discretion to sanction loans to individuals

above the age of 67 years, $rovided son - daughter - s$ouse, who is a legal heir and

below the age of 87 years, with sufficient income for servicing the loan re$ayment,

/oins as co9borrower - guarantor. 'oan re$ayment in such cases should be made

through a /oint de$osit account - current account in the names of all the /oint

borrowers - guarantors. "nder #latinum !ge Limit Scheme

he maximum age limit is raised from 67 years to 68 years sub/ect to fulfillment of the

following conditions:

3. 0stimated rental value of house forms at least 47; of re$ayment (i.e. 01I).


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*ge 'imit scheme < should be $ersuaded to include their s$ouse as a co9borrower and

age of the younger of the borrowers may be taken for fixing the re$ayment $eriod

irres$ective of the income of the s$ouse.

$o% of &o'Borro(er:estricted to maximum = including

s$ouse-children-$arents-siblings. &owever, *>1 ?egion@ - *>1 (!ranch) can relax

maximum no of co borrowers $rovided the $ro$erty is registered in the /oint names of

all the borrowers and loan re$ayment is made through an account with us in the /oint

names of all the borrowers.

SBI Home Loan Amount*ctual loan amount will be determined taking into consideration such factors as

a$$licantAs income and re$aying ca$acity, age, assets and liabilities, cost of the $ro$osed

house-flat etc. o enhance loan eligibility you have o$tion to add:

Income of your s$ouse - your son - daughter living with you, $rovided they have

a steady income and his- her salary account is maintained with !I.

0x$ected rent accruals (less taxes, cess, etc.) if the house - flat being $urchased is

$ro$osed to be rented out.

Be$reciation, sub/ect to some conditions.

egular income from all sources.

Security for SBI Home Loan0Cuitable mortgage of the $ro$erty

Margin / LTVatio 'oan *mount #$to s.


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Interest on the loan will be charged at $revailing floating rate of interest on a daily

reducing balance at monthly rests. he rate of interest is sub/ect to revision from time

to time due to (i) changes in !ase ate or (ii) revision even without change in !ase

ate the !ank has the o$tion to reduce or increase the 01I or extend the re$ayment

$eriod or both conseCuent u$on revision in interest rate.

Fi"e# ate of Interest!

Interest on the loan will be charged at the $revailing fixed rate of interest on daily

reducing balance at monthly rests, sub/ect to interest rate reset at the end of every two

years on the basis of fixed interest rates $revailing then.tate !ank of India (!I) (link

is external)may at its discretion sti$ulate the $eriodicity of com$utation of interest.

urther, !I may at its sole discretion alter the rate of interest suitably and

$ros$ectively in the event of ma/or volatility in interest rates during the $eriod of the

agreement. henceforth the rate of interest varied as aforesaid shall be a$$licable to

the 'oan. !I shall be the sole /udge to determine whether such condition exists or

not. If the !orrower is not agreeable to the revised interest rate so fixed, the !orrower

can reCuest !I, within 38 days of recei$t of the notice intimating change in interest

rates from !I, to terminate the loan and the !orrower shall re$ay the 'oan and any

other amount due to !I in full and final settlement in accordance with the $rovisions

of the *greement relating to $re9closure.

SBI Housing Loan $alculation of interest

Interest on the amount of the loan will be a$$lied at the $revailing rate $er annum on

daily reducing balance with monthly rests.

leasedownload this 0xcelfile for calculating your !ank loan 01I.

SBI Housing Loan % Intimation of c&ange in Interest atehe borrower shall be deemed to have notice of changes in the rate of interest whenever

there are changes in !ase ate or increase in interest rates where there is no change in

!ase ate are either dis$layed on the 2otice !oard of the !ranch or $ublished in news

$a$ers or made through entries of the interest rate charged in the $assbook-statement

of account furnished to the borrower and the borrower is liable to $ay such revised rate

of interest.

Penal Interest of SBI Housing LoanIn the event of a default in $ayment or any irregularity in the account, the !ank reserves

the right to levy a higher rate of interest as it deems fit. 0nhanced rate of interest F


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$.a on the irregular amount for the $eriod of irregularity, over and above the a$$licable

rate will be charged if the 0Cuated 1onthly Instalment (01I) remains un$aid for a

$eriod of =7 days from the due date, for any reason, including a bounced cheCue.

SBI Housing Loan Bounce# c&e'ue/E$Sor SI #is&onours* $enalty of s overnment romissory 2otes, shares- debentures, gold ornaments or such other

tangible security as may be deemed a$$ro$riate.
http://www.lopol.org/article/abbreviations-and-acronyms-commonly-used-in-indian-banking-system#ECShttp://www.lopol.org/articles/construction-projecthttp://www.dearestate.com/http://www.dearestate.com/http://www.lopol.org/article/bank-loan-sbi-home-loan-faqhttp://www.lopol.org/article/bank-loan-sbi-home-loan-faqhttp://www.lopol.org/article/abbreviations-and-acronyms-commonly-used-in-indian-banking-system#ECShttp://www.lopol.org/articles/construction-projecthttp://www.dearestate.com/http://www.dearestate.com/http://www.lopol.org/article/bank-loan-sbi-home-loan-faq


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Interim Security #ending Mortgage:Hherever creation of mortgage is likely to be

delayed for any valid reason, suitable security including third $arty guarantee, as

considered necessary, may be taken for the interim $eriod.

(tilisation of t&e SBI Housing Loanhe amount of the loan shall be utilized strictly for the $ur$ose detailed in theborrowers a$$lication form and in the manner $rescribed. he construction of the

house-flat or the modification-extension $ro$osed by the borrower in the existing

house-flat should be strictly according to the $lan a$$roved by the 'ocal

*uthorities-own lanning and Bevelo$ment authorities. *ny modification desired in

the $lan as originally a$$roved, can be undertaken only after ex$ress sanction for it has

been obtained from the a$$ro$riate authority.

Insurance for SBI Housing Loanhe house-flat shall be insured com$rehensively for the market value covering fire,

flood, 0arthCuake etc. in the /oint names of the !ank and the borrower. Gost of the same

shall be borne by the borrower.

Inspection of t&e SBI Housing Loan (tili)ationhe !ank will have the right to ins$ect, at all reasonable times, the borrowers $ro$erty

by an officer of the !ank or a Cualified auditor or a technical ex$ert as decided by the

!ank and the cost thereof shall be borne by the customer.

Fees an# c&arges for SBI Housing Loan3. SBI Housing #rocessing fee:Is to be $aid u$front at rates laid down by the

!ank from time to time. 0ntire $rocessing fee would be refunded if a$$lication is

re/ected after initial scrutiny. If loan a$$lication is re/ected after site ins$ection

and-or obtention of legal-valuation re$ort, 68; of the $rocessing fee will be

reimbursed. 2o refund of $rocessing fee is $ermissible in case of sanction-re/ection by

sanctioning authority.

SBI Housing Loan Amount an# Processing Fee s&all be as

follo*s!#$to s.8 'ac 9 s.3777-9

*bove s.8 'ac and u$to s.37 'ac 9 s.


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*bove s.3 Gr and u$to s.8 Gr s.37,777-9

*bove s.8 Gr s.


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K. he loan will be disbursed in stages where a loan for construction is desired or

$urchase is through $ayment to seller in installments.

8. *ll necessary statutory com$liance are in $lace.

!I may disburse the Cuantum of loan in lum$ sum or in installments at its own

discretion de$ending on the level of construction of the &ouse-lat as acce$table to

!I.

!I will disburse loan amount directly to the builder-seller-society as the case may be

and as reCuested - s$ecified- directed by the customer to !I at the time of each

disbursement. !I shall not be res$onsible - liable in any manner whatsoever for any

delay by the customer in $roviding such reCuest- s$ecification- direction to !I and

the customer shall not claim any costs, charges and ex$enses in any relation to any

non9disbursal by !I due to any such delay by the customer.

he !ank reserves the right to collect any tax if levied by the tate-Gentral

>overnment and-or other *uthorities in res$ect of this transaction.

+efault of SBI Housing LoanIn the event of default i.e. if the amount due is not $aid by due date, the customer will be

sent reminders from time to time for $ayment of any outstanding on his loan account,

by $ost, fax, tele$hone, email, 1 messaging and-or through third $arties a$$ointed

for collection $ur$ose to remind, follow9u$ and collect dues. *ny third $arty so

a$$ointed, shall adhere to theIndian !anks *ssociations (I!*) (link is external)code ofconduct on debt collection.

SBI Housing Loan % +ocuments To Be Submitte#o avail &ousing 'oan from tate !ank Of India (!I), one has to submit the -ersonal

relateddocuments and -ro-erty relateddocuments:

Personal elate# +ocuments'ist of $a$ers- documents a$$licable to all a$$licants:

3. Gom$leted !I &ome 'oan a$$lication


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L. tatement of !ank *ccount- ass !ook for last six months

6. ignature identification from $resent bankers

4. ersonal *ssets and 'iabilities statement

For guarantor ,*&ere-er applicable.!

3. ersonal *ssets and 'iabilities tatement


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A##itional #ocuments re'uire# *&en ol# property is beingpurc&ase#!

3. Ealuation certificate from a >overnment a$$roved valuer.

ovt. a$$roved architect- structural engineer certifying the

condition of the house- flat.

=. he condition of the house - flat should be such that the security cover for the

!ankAs loan remains unaffected till full re$ayment of the loan.

Property #ocuments!3. ale Beed, *greement of ale, Original share certificate(s) issued by the society.


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+o*nloa# Ban0 Loan EMI $alculatorleasedownload this 0xcelfile for calculating your !ank loan 01I.

01I is based on mainly K factors:

3. 'oan *mount


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4enor:hree 1onths

M&LR Interest:D.37;

4enor:ix 1onth

M&LR Interest:D.38;

4enor:One ear

M&LR Interest:D.


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%he ban$ had returned the original documents !years ago but had failed to

remove the lien on mortgage entered on the house nor provide the &o 'bject

Certi(cate.

%his prevented him from having an immediate sale and he had to get the

pending documents. It is the responsibility of the ban$ to provide these

documents once the home loan is closed.

In India# sometimes you don)t get unless you as$ for them. *o be sure to as$

what you need. +et us now dive into what things you must do once you pay

all your home loan installments and close your home loan.

,opular post- Complete guide on PPF

Home Loan Pre-payment

Home loan preclosure is nothing but ma$ing your home loan debt payments

to the ban$ in part or full before the tenure. home loan is usually for 1/ to

!0 years and is one of best investment options. If you)re planning to

close this before the scheduled tenure then you must let the ban$ or

(nancial institution in writing.

Ban$s and housing (nance companies usually charge a prepayment

penaltyif loan is closed ahead of tenure.

*ome ban$s do not levy this if you establish the source of funds used forpre-

payment. %his will involve furnishing your salary slips or I% (ling with ban$

statement.
http://www.smartmoneygoal.in/blog/ppf-rules-interest-balance-loan-withdrawal-invest-transfer/http://www.smartmoneygoal.in/blog/best-investment-options-plans-india-short-beginners/http://www.smartmoneygoal.in/blog/ppf-rules-interest-balance-loan-withdrawal-invest-transfer/http://www.smartmoneygoal.in/blog/best-investment-options-plans-india-short-beginners/


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Update:s per the new mandate of eserve Ban$ of India# ban$s are not

allowed to collect prepayment penalty anymore on oating rate loans.!

%his is a huge leap forward for consumer welfare and home loan borrowers.

*o you don)t need to pay anymore penalty. If your ban$ still levy a pre

payment penalty you can forward a complaint to Consumer 2orum of India

and Ban$ing 'mbudsman.1

BI &oti(cation- Abolition of penalty by RBI

7 must do things on home loan closure

"e have provided 3 points which you need to follow to complete the homeloan closure. ,oints 1#!#4#3 are the most important. 5on)t neglect or miss

them at any cost.

1 !et bac" all the original documents

'nce you have made all your payments# the Ban$ or Housing 2inance

Company will li$ely give you the original documents. 6ou should ma$e sure

that all the documents you submitted with the ban$ when ta$ing the loan are

returned. 7sually it will be the %itle 5eeds and 8other 5eed 9if applicable:.

5on)t just chec$ for document alone. 8a$e s1ure that all the pages are

present in good condition as well. I have seen instances where last page of

sale deed went missing. In that case you need to arrange for the missing

page which is a tedious process.

8a$e sure all the pages are intact in front of the ban$ o;cial before signing

on the ac$nowledgement of the ban$.

'nce you sign# you can)t undo it and ban$s usually won)t be responsive in

this regard. It is usually a good procedure to obtain the documents from ban$

by visiting them than re


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%ip- 'nce you get the originals scan them and $eep a soft copy in a safe

place.

lso read- #ocuments to chec" to avoid fraud $hen buying house

2) Obtain No Object Certificate

&'C or &C is a &o 'bject certi(cate which is a clearance certi(cate from the

ban$ or housing (nance company. %his states that the Ban$ does not have

any more interest in the property and its cleared by the ban$ after removing

all hypothecation.

"hen you get this ma$e sure the &'C clearly mentions the ,roperty details9li$e address etc.#: # name of the borrower# home loan account number# date

of loan starting and closure# amount borrowed and repaid9some ban$s don)t

mention: .

lso a clause should be clearly mentioned that the borrower has paid all the

dues and the property is now debtfree. %his will ma$e sure that the property

is entirely yours now.

) !emo"e lien on property from !egistrar Office

In some cases where the credibility of the borrower is


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Source: indiatimes.com

If no lien was created# then there is no issue. However# if a lien was created

then it is important to have this lien removed.

ban$ o;cial will accompany you to the egistrar o;ce to terminate this

lien. emember that you will not be able to sell the property unless this is

removed.

home loan closureis incomplete without this process. %his is what

delayed things for my friend Jeeva mentioned in the beginning. It will ta$e 3

to 10 days for changes to reect in the egistrar accounts.

#) C$%$L Credit &pdate

+enders do not show the same interest in updating CIBI+ when loan is repaid

as when loan is ta$en. Ban$s=(nance institutions often delay or forget to

inform CIBI+ when a home loan is preclosed.

CIBI+ score is nothing but proof of your credit worthiness. It ta$es !040

days to complete the process. Be in touch with your ban$ to ma$e sure this

is done 9It)s li$ely you won)t get proper response J . good relation with

ban$er comes in handy:. 'nce the ban$ informs its done# get an updated

CIBI+ report to ma$e sure it is reected in score.

Chec$ out below two articles related to this process

%o$ to get Credit score and ho$ it a&ects you

'op 1( tips to improve credit score

') (et legal clearance certificate from layer

legal clearance certi(cate from a reputed lawyer is an optional attachment.

*ome people don)t prefer to get this. But we suggest you get this as this will
http://www.smartmoneygoal.in/blog/what-is-credit-score-range-how-to-check-get-cibil/http://www.smartmoneygoal.in/blog/top-tips-to-improve-credit-score-fast-india/http://www.smartmoneygoal.in/blog/what-is-credit-score-range-how-to-check-get-cibil/http://www.smartmoneygoal.in/blog/top-tips-to-improve-credit-score-fast-india/


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speed up your process if you plan to sell the house. It also helps to get a

legal opinion to ma$e sure the home loan closure procedure is indeed

complete.

*) Ha"e a detailed trac+ of loan repayments

It is advisable to $eep a trac$ of your ban$ statement which reects your

+oan >8I. If you made any lump sumprepayments$eep a photocopy of the

checonomic times article- Home loan closure

7) Obtain a ne ,ncumbrance certificate from !egistrar

%his is a must do step. 'nce the ban$ has provided the &C and removed any

e?isting lien# apply for an >C in the egistrar ';ce. n >C is nothing but a

document with all (nancial transactions performed on the property.

'nce the mortgage=loan is cancelled# it should be reected in the >C. n >C

is a very important document. *o if the latest >C does not reect closure of

loan# approach the ban$ or egistrar for further procedure. 5on)t neglect this

step. %his will complete the home loan prepaymentprocedure1

Chec$ you >8I - %ome loan )*I calculator

It is not enough to just pay bac$ your home loan. 8a$e sure that you

complete all the necessary procedure of home loan closure to avoid future

problems. Close your home loanand enjoy your stay in the house

peacefully. Cheers@

A
http://articles.economictimes.indiatimes.com/2010-02-21/news/27577135_1_loan-post-dated-cheques-bank-returnshttp://www.smartmoneygoal.in/blog/loan-emi-calculator-monthly-installment/http://articles.economictimes.indiatimes.com/2010-02-21/news/27577135_1_loan-post-dated-cheques-bank-returnshttp://www.smartmoneygoal.in/blog/loan-emi-calculator-monthly-installment/