What is the Checklist of Documents for a Home Loan Balance Transfer?

What is home loan balance transfer?

A home loan balance transfer option, as the name implies, allows a loanee to transfer their active house loan to a loan provider with a reduced rate. As a result, the applicant saves money on higher home loan interest rates and pays reduced EMIs. Most major banks and non-banking financing companies (NBFCs) provide low-interest home loan balance transfers. In addition to assisting the applicant in lowering their home loan fees, they can also benefit from a top-up loan. On a home loan transfer, a top-up loan is offered. It is an additional sum made available by new loaner. The potential loanee is free to spend the funds for whichever purpose they see fit. A top-up home loan's interest rate and tenor are nearly identical to that of an ongoing house loan.

What is the checklist of documents for a home loan balance transfer?

The following documents are required for a home loan balance transfer:

• KYC documents
• Address Proof
• Financial documents
• Property related documents
• Documents related to the loannee’s active home loan.
  

What documents does a loanee need to collect from their existing loan provider?

There are various documents required that the loan recipient needs to collect from their existing loaner, some of which are as follows:

• Consent Letter- The receiver needs to submit an application to their existing loan company informing them about the decision of switching the home loan.
  
  
• No objection certificate- It is a certificate that the loan company gives to the loanee stating that they have no objection with the loanee transferring their home loan from the existing loan company to the new one.
  
  
• Foreclosure letter- A letter of foreclosure is sent to them, stating that their housing loan is pre-closed on a certain date and that there is no outstanding balance. This letter is obtained after the loanee's outstanding sum is paid to their existing creditor by the new creditor.
  
  
• Home loan statements- The applicant must also obtain a copy of their home loan statement, which shows their EMI payments history. The outstanding loan amount will also be listed on the loanee's home loan statement.
  
  
• Property Documents- The property document from the present loan provider is the next home loan balance transfer document that the receiver needs.
  
  
• Post-dated cheques- The applicant must have submitted post-dated cheques (PDCs) to their current loan provider when applying for a house loan. It's time to collect those pending cheques now that the loanee is foreclosing with their existing loan company.

Factors to consider before opting for a home loan balance transfer

Factors to consider in this regard are-

• Evaluate CIBIL score-  Credit score will tell whether or not one is eligible for a balance transfer. The credit rating will be harmed if one has been inconsistent in repaying credit and EMIs on time. If an applicant has a bad credit score, they will be less qualified for a loan balance transfer with a new loan provider.
  
  
• Balance transfer charges- Before deciding on a balance transfer, keep in mind that there are fees associated with transferring one’s home loan. Processing, application, administration and inspection fees are parts of the home loan balance transfer procedure. In addition, there will be charges that the existing and prospective loan company will ask for. One can use any home loan balance transfer calculator to estimate the cost of the process.
  
  
• Read the fine print- After selecting a loan company for the house loan transfer, make sure one reads all of the terms and conditions before proceeding. One will avoid any hidden fees this way.
  
  
• Check for top-up loan - Once considering the home loan transfer option, look for the availability of a top-up loan which ensures the higher amount of value that one’s loan provider may offer at a rate similar to the home loan.
  
  
• The stage of home loan tenor- Many experts recommend moving the amount of a house loan early in the term. This is because EMIs mostly cover the interest portion of one’s loan during the first 4 to 5 years. Therefore, transferring one’s home loan balance in the middle or end of the term would not benefit the individual.

Keeping these tips in mind, proceed to check the pre-approved offer for a property home loan refinance from various Indian companies offering housing loans. By entering a few basic details, the applicant can view deals that are customised for them and enjoy instant, hassle-free approval.

Read Also: Documents Checklist for a Home Loan Balance Transfer