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31-Aug-2024 | Home Loan
Closing your home loan is a crucial step in the complete process from applying for a home loan to its successful repayment. Just like you have been too cautious while applying for a home loan, you should also pay similar attention while closing it. The journey of homeownership is too lengthy and you must move step by step till you reach successful home loan closure. This phase ensures that all financial and legal obligations have been met successfully and there is a smooth and seamless purchase of the house.
To close your home loan, it is necessary to follow the below-mentioned steps-
The closing disclosure is a vital document that includes final details of your account such as principal amount, interest rate, and monthly payments. Ensure that these details get matched with your original documents. The process of home loan closure needs to start immediately just after paying the last loan receipt.
After reviewing the closing disclosure, you need to contact the lender. You have to notify the lender for the home loan closure as they would have engaged with many loans simultaneously. Thus, it is essential to contact them and inform them that you are planning to close your home loan on a particular date. You can send a written letter to the lender, which might require by some of the financial institutions as per their requirement. In this letter, you should request to lender to give detail summary of your home loan closure with exact remaining amount, if any, you have to pay. This statement also includes interest rate, fees, or some extra charges (if any).
After that you have to review your loan agreement for closure to ensure accuracy of legal and financial documentations.
Complete paperwork gives you peace of mind from the liability of home loan. Retrieve original property document which include sales deed, possession letter, payment receipts (if any).
Verification of the loan payment is the vital step in process of home loan closure. This might be include principal amount, interest rate, any other fees or charges are paid according to the agreement’s terms and conditions. Final review of payment include confirmation of loan receipt and cross-checking documentation related to payment to ensure accuracy and consistency.
Request to the lender for No Due Certificate on the closure of your loan. This states that you have paid all the amount including extra fees or charges; there is no balance pending to be paid to the lender. It is a legal document which includes all details such as your name, address of the property, account number, date of the closure, and other crucial information. It is important to clear all dues because some financial companies may take any legal action against you, if you not clear all the dues.
Collect all your original documents from the lender to ensure completion of the home loan closure process. Check that all the documents are present which you submitted at the time of applying for home loan. Ensure that the papers’ condition is good or same like you have submitted. This takes you to safer side for any future transactions.
After paying off complete home loan, your lender informs credit bureaus about the same. To ensure everything is fine, go through your credit score to check the loan closure. If you’re not able to check this, contact to the lender to resolve the problem.
Closing your home loan is not just a final step but a significant milestone in your journey toward homeownership. It requires meticulous attention to detail, from reviewing all financial documents to ensuring that your original property papers are safely returned. By following the outlined steps—reviewing the closing disclosure, contacting your lender, verifying payments, and collecting the No Due Certificate—you can ensure that your home loan closure is smooth and problem-free. Remember, completing this process not only frees you from financial liability but also positively impacts your credit score, marking a successful and responsible closure to your home loan journey.
