SYNOPSIS

When you fully pay off your home loan, ensure that –

You collect all your original documents from your lender.
Obtain a ‘no dues’ certificate from your lender.
Get lien on property removed.
Obtain the updated Non Encumbrance Certificate.
Your credit records are updated.

You will experience a unique mix of relief and pleasure after paying the final installment of your home loan. The effort – of applying for a loan, making the down payment and paying the EMIs every month – bears the sweetest fruit when you have the absolute ownership of your house. While you celebrate the achievement of owning a debt-free house, you need to complete certain tasks which have a direct impact on your credit score and property records. A little diligence on this front will relieve you of hassles at the time of transfer or sale of the property. After settling your housing loan, you need to:

Collect all original documents from the lender

You should make it a point to collect all the documents presented to the lender at the time of availing the loan. Some of these documents include the sale deed, title deed, loan agreement and power of attorney. You also need to ensure that the documents are in good condition, with all the pages intact.

Obtain a ‘No Dues’ Certificate (NDC) from the lender

A ‘No Dues’ Certificate (NDC) from the lender is one of the most important documents which should be collected after the repayment of the loan. The NDC states that all the dues have been settled and the lender does not have any rights or claim on the property. The document should mention the critical details related to the housing loan, including the address of the property, name of the customers, loan account number, amount of loan and date of starting and closure of the loan. It is prudent to make duplicate copies (and also soft copies) of the NDC to ensure smooth dealings in the property in future.

Ensure removal of lien on the property

At times, lenders may put a lien on the property, which effectively prevents the customers from selling the property. In such cases, the lien should be removed after the repayment of the loan. The procedure will require a visit to the Registrar’s Office along with an official from the lender’s side.

Obtain the updated Non Encumbrance Certificate

It is imperative for you to obtain the updated Non Encumbrance Certificate, which is a legal document containing detailed records of all financial transactions related to the property. Once you have settled your housing loan, the repayment should be reflected in the Non Encumbrance Certificate.

Ensure that your credit records are updated

It is prudent to check if your credit records are updated post repayment of the loan. Usually, it takes around 20-30 days for the repayment to be reflected in your credit history. Subsequently, you should obtain your credit report and check the updated record.

Upshot

Property ownership is surrounded by several legal aspects which, if ignored, may prove to be a hindrance at a later point in time. It is therefore essential to immediately settle the records, have them updated, and obtain the requisite documents supporting your ownership. Also, it is well-known that settling legal or formal records becomes increasingly tedious with the passage of time. Therefore, it’s best to be proactive in this matter to avoid hassles in the future.