Achamthavir.com

Hi

Anyone knows how to transfer home loan from one bank to another bank?

Thanks in advance.

Gaja

PROCEDURE FOR BALANCE TRANSFER OF HOME LOAN

Refinancing a current home loan or transferring the outstanding home loan balance from one lender to another is known as balance transfer. Effectively, the new lender gives the old one the outstanding money on the loan. Once the balance transfer is carried out, the liability and obligation of the borrower for repaying the outstanding amount is towards the new lender.
A borrower may opt for a balance transfer to avail of lower interest rates or better terms than those of the existing loan, if the existing housing finance company (HFC) is unwilling to offer the same. If he has a good repayment track record, he is most likely to get a good deal on interest rates with the new lender. To effect a transfer, one should get a foreclosure letter or consent, statement of account and list of property documents from the existing HFC.

OTHER FACTORS INVOLVED
1 LOAN APPLICATION:
The borrower must submit the loan application to the new HFC, alongwith supporting documents, which include bank statement, repayment track record, foreclosure letter and list of property documents with the existing lender.
2 TOP UP LOAN
The new lender assesses the property against which the loan is to be sanctioned and might be willing to give a top up loan against the reise in the value of the property
3 PRE PAYMENT PENALTY
HFCs may charge a prepayment penalty, especially if the loan is being rransferred from one lender to another. It is chared as a percentage of the total outstanding loan. Some banks also impose a minimum period before allowing a balance transfer. But, now Govt. announced some regulation on these issues and will be implemented in due course, which will give major relief for borrowers who opted for early closure.
4 DOCUMENT PROOF
All photocopies of the supporting documents must be self attested.
5 RELEASE OF DOCUMENTS
The existing lender may not release the property documents before the loan is repaid. The new lender may be willing to release the payment against a letter from the current lender giving details of the legal papers held by them and indicating the number of days it will take to release the documents to the borrower.

Source: The Economic Times – Wealth dt 21st Nov 2011 – 27th Nov 2011 under Paper Work column.

V.Senthilnathan