Home buying is a happy thing but sometimes people feel like to sell-off the particular property as they find a better one. In fact, the homeowner also decides to sell the currently owned property due to the scarcity of funds or to invest in another property which offers a handsome rental income. Irrespective of the reason, we here help you know the ways to sell a residential property with an outstanding home loan amount:
- If Buyer is Willing to Pay From his/her Savings
This is the first situation to consider for selling a property and the Bank i.e. financial institution has no role to play here. The monetary transaction in this property deal takes place directly between the seller and the buyer.
Secondly, the seller can ask the borrower, that is the Bank to provide him/her with an outstanding home loan letter and the buyer can deposit the entire amount directly into the Seller’s loan account. This process clears the property owner with liability and thus the bank releases the property document of the same. The seller can then transfer the property title onto the name of the homebuyer.
Thirdly, if the home loan is waived-off while leaving some outstanding amount from the buyer’s side then the seller is eligible to keep that portion of amount with him and the buyer can transfer this money into the personal account of the seller.
- If Buyer Avail Loan from the Seller’s bank/lender
The Tripartite agreement plays an important role here with the inclusion of the Seller, Buyer and the Bank. This process involves all the above-mentioned parties and there is minimum check counter which allows the selling procedure to get completed in the least time possible.
The major check is carried out about the buyer and information like his previous and ongoing loan details, salary details and financial condition of the buyer to pay for a property purchase. With the inclusion of a bank as a party, the financial institution keeps a track from sanctioning loan to the buyer until the payment of Seller’s outstanding home loan amount.
If the property values more than the home loan amount then the buyer can pay the remaining amount directly to the seller after settling the outstanding loan amount.
- If Buyer Avail Loan from Another Lender
Firstly, the seller request his bank to provide an Outstanding home loan letter along with the checklist of the property documents that are in the Bank’s custody. Once the property papers are received by the buyer then he/she can apply for a home loan on the basis of these papers in any bank of his/her choice apart from the Seller’s same bank.
The loan application is rejected if the buyer fails to fit in the loan sanction Creteria but if the loan is sanctioned then the Bank will issue a cheque in favour of seller’s bank bearing the outstanding loan amount.
The seller’s bank will provide the original property papers to the Seller after the cheque is cleared and the seller can then complete the process of transferring a title onto the buyer’s name.
- Documents Required to Sell Property with an Outstanding home Loan:
- Mother Deed
- Sale Deed
- Documents pertaining to home loan sanctioned
- Housing society Share Certificate
- Society NOC
- Encumbrance Certificate
- Property Tax Receipts