Planning for a better home loan rate or a lower EMI outgo? Even if you are servicing an ongoing home loan, you have the choice to transfer your outstanding home loan balance to another lender. The facility to switch your existing home loan to another lender is called home loan balance transfer. This switch gives you the chance to lower your interest rate on home loan and thus, your EMI. Additionally, it even permits you to avail a substantial home loan top up at a relatively low interest rate. Note that a top up loan is the provision of additional funds, which is over and above your existing home loan amount to meet your various personal monetary mismatches.
However, like any loan, for home loan balance transfer too, you must be ready with certain necessary documents for a hassle-free processing experience. Check out the documents required for home loan balance transfer:
- Consent letter
To notify your existing lender about your home loan balance transfer decision, you must submit a formal application. Along with the written application, you must also request for a consent letter. This consent letter is important for your new lender to go ahead with the balance transfer process.
- NOC – no objection certificate
Your current lender must issue the no objection certificate (NOC) stating that they have no issue with the transfer of home loan to the new lender.
- Loan agreement
Sanction letter or loan agreement from your existing lender is a must for the home loan transfer.
- Foreclosure letter
The letter declares your home loan has been foreclosed with no outstanding amount. You obtain this letter once your new home loan lender settles the outstanding home loan with your existing lender.
- Statement of home loan
The statement mentions your home loan specifics including your EMI repayment record and history. Additionally, the statement shows your outstanding home loan balance. You can avail the statement from your current lender.
- Property documents
You must submit the listed documents to your new lender:
– Stamp duty documents
– Registration certificate
– Papers mentioning the property ownership
- Post-dated cheques
Ensure to collect all your post-dated cheques from your existing lender. These cheques are generally submitted when obtaining the home loan.
- KYC documents
Your new lender will require these documents:
- Identification proof
– PAN
– Voter ID card
– Driving license
– Aadhaar
– Employment ID card issued by the NREGA
- Address proof
– Voter ID card
– Passport
– Aadhaar
– Driving license
- Financial documents
To verify your income and repayment potential, home loan refinance lenders ask for your financial documents. These documents include:
– Form 16
– Latest salary slips
– Employment documents
– Past 6 months bank statements
While these documents are a must for a hassle-free approval process, you must also consider using a home loan balance transfer EMI calculator to finalize the lender. This calculator helps you understand your overall savings in interest cost. Avoid selecting any lender solely based on home loan balance transfer interest rate. Instead, compute your savings in interest cost to opt for the one offering maximum savings in interest cost. This is because provision of lower rates necessarily does not mean a lower loan outgo, other factors like processing charges, administrative fee too are included which may spike your overall loan cost.
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