Home Loan Transfers
To most of the folk, this may come as a shock but yes you have an option to transfer your home loans from one lender to another. There are multiple advantages in this but the most outstanding advantage is that of lower interest rates and better negotiating power with the lender. Another reason to transfer the home loan is when you want to increase the repayment tenure. If you want a top up loan on the existing one the existing lender may not offer, then also you can transfer the loan.
The first step is paying the existing lender off for any outstanding amount on the property. Then only he will release the documents. For that you need to approach your existing lender and get a letter stating the documents related to the property on hold by the existing lender, the amount to be remitted to close the loan and a signed affidavit guaranteeing the new lender that the documents will be released once the loan is closed. Once this letter is given to the new lender, he may trigger the process from his end and also may do a due diligence check and the repayment capability of the debtor. After everything is in order he may issue the cheque for the existing lender.
It is advisable to have a good track record and keep your CIBIL scores up for home loan transfers to happen. Some of the charges to pay are prepayment charges for the existing lender but this is not required for floating home loans. If the borrower pays the amount from his own fund, this charge cannot be levied. Another charge the borrower must pay is the processing charge to the new lender although the amount is negotiable and in cases can also be waived off. The stamp duty and registration charges has to be paid and if the new creditor wants revaluation of the property done for any top up loans those valuation charges should also be paid.