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Category: Home Loan

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Home Loan

Can I Clear the Seller’s Home Loan Directly When Buying a Resale Flat?

If you are buying a resale flat where the seller has an existing home loan, you have several options to proceed with the transaction. Let’s explore these options and understand the safest way to handle this situation

OPTIONS FOR HANDLING THE SELLER’S EXISTING HOME LOAN:

Option 1: Loan Transfer within the same bank:

The process is relatively simple if you are taking a home loan from the same bank where the seller has their loan. The bank will transfer the loan balance from the seller’s account to your account without releasing the property documents.

Option 2: Loan Transfer to Another bank:

The process of taking a home loan from a different bank involves,

  • The seller collects the List of Documents (LOD) from their bank
  • Handing over the LOD to your bank
  • Your bank issuing a cheque to the seller’s bank to settle the loan
  • Collecting the property documents from the seller’s bank

Option 3: Self-Finance (without a Home Loan)

If you are buying the property with your own funds, you can directly help the seller clear their loan by making a payment to the seller’s bank. Once the loan is cleared, the seller can collect the property documents.

However, this option carries some risks:

  • The bank will not release the property documents directly to you
  • The seller may delay handing over the documents until the Sale Deed is Registered, which can be stressful

CASE STUDY: LOAN TRANSFER FROM ONE BANK TO ANOTHER

Here is a real-life scenario we encountered recently:

  • Property Details: The resale flat’s price was Rs. 60 Lakhs, and the seller has a loan outstanding of Rs. 22,25,408 from IDFC First Bank
  • Buyer’s Loan: The buyer took a loan from SBI

Procedure Followed:

  • The Buyer paid a token amount of Rs. 10,000 to the seller and signed the Sale Agreement
  • The Seller collected the LOD from IDFC First Bank and handed it over to SBI
  • SBI approved the buyer’s loan of Rs. 50 lakhs based on the LOD, Sale Agreement and income proof
  • SBI disbursed the loan amount in two cheques:
    • Cheque 1: Equivalent to the seller’s loan outstanding amount, addressed to IDFC First Bank
    • Cheque 2: Final settlement amount, addressed to the seller’s name

The seller and SBI representative visited IDFC First Bank to hand over the cheque 1 and collect the title documents

(Note: The cheque for loan clearance is addressed to the seller’s bank. Refer to below image)

  • The buyer and seller registered the Sale Deed
  • Seller and Bank registered the Memorandum of Deposit of Title Deed (MODT)
  • SBI released the cheque 2 to the seller as the final settlement

KEY TAKEAWAYS:

If self-Financing:

  • Write a cheque directly to seller’s bank for loan clearance
  • Be cautious, as the seller will collect the property documents and may not hand them over until after Sale Deed Registration

If Taking a Home Loan:

  • This is the safest option
  • The bank manages the financial transactions and secures the property documents on your behalf

Pro Tip: Even if you can self-finance, consider taking a small home loan to ensure a secure transaction.

For consultation, please write to us pgnproperties@gmail.com or WhatsApp to +91-97424-79020

Thank you for reading…

Categories
Home Loan

How to Check If a Property Has an Existing Loan

How to Check If a Property Has an Existing Loan
How to Check If a Property Has an Existing Loan

When purchasing a property, it is essential to ensure that it is free from any financial encumbrances. A common question many buyers ask is: How do I verify if a property has a loan or mortgage attached to it?

There are two primary methods to determine whether a property has a loan:

  1. ENCUMBRANCE CERTIFICATE (EC)

An Encumbrance Certificate, commonly referred to as EC, is a crucial legal document used to confirm the ownership and legal status of a property. It provides a detailed record of all registered transactions related to the property, including any mortgages or loans.

HOW THE EC REFLECTS A PROPERTY LOAN

To help you understand better, here is a real-life example from my own experience:

  • On 12–11–2021, I availed a home loan of ₹40,00,000 from State Bank of India to purchase a 1200 sq. ft. plot in Bangalore.
  • The loan agreement between the bank and me was registered at the sub-registrar’s office, and the transaction was duly reflected in the Encumbrance Certificate.
  • In the EC, the bank’s name appeared in Column 6, indicating that the property was under mortgage.

Refer to below EC

Later,

  • On 17–02–2023, I repaid the loan in full and executed a Discharge Deed, which was again registered with the sub-registrar.
  • In the updated EC, the discharge of the loan is reflected in Column 5, confirming that there is no existing mortgage or lien on the property.

KEY POINTS TO REMEMBER:

  • If the loan is active, the bank’s name appears in Column 6 of the EC.
  • If the loan is closed and a Discharge Deed is registered, the bank’s details are shown in Column 5.
  • Always obtain the latest EC, covering at least 13 years or more, to ensure a complete record of transactions.
  1. TITLE DOCUMENTS

Title documents are the legal papers through which ownership of the property is transferred from the seller to the buyer. These documents include:

  • Parent Deed
  • Sale Deed
  • eKhata Certificate
  • Property Tax Receipts

IMPORTANCE OF VERIFYING TITLE DOCUMENTS

Some private lenders or financial institutions do not register the mortgage with the sub-registrar’s office. Instead, they retain the original title documents with them as security until the loan is repaid.

Therefore, if the EC does not reflect any loan details:

  • Request to inspect the original title documents.
  • If the seller is unable to produce the originals, it could mean that they are currently held by a lender against a loan.
  • Avoid relying solely on photocopies; insist on verifying the original documents.

NEED PROFESSIONAL HELP?

We offer personalized property consultation services to help you verify ownership, check for existing loans, and ensure a legally sound transaction.

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Home Loan

Does a Home Loan Cover Stamp Duty and Registration Charges?

Home Loan Stamp Duty And Registration Charges

No, a home loan does not cover stamp duty and registration charges.

These charges must be borne by the purchaser and are not included in the home loan amount sanctioned by financial institutions. Below is a detailed breakdown of the costs involved:

  1. Sale Agreement Adjudication

The Sale Agreement is a key component of the home loan documentation process. It must be adjudicated and submitted to the bank for the loan to be processed.

In Karnataka, the adjudication fee is 0.5% of the consideration value.

Example:

If the purchase price of a property is ₹1.28 crore:
Adjudication Fee = ₹1.28 Cr × 0.5% = ₹64,000

Sale Agreement adjudication looks like image below

Note: The adjudication fee paid is adjusted at the time of executing the Sale Deed.

  1. Sale Deed Registration

Sale Deed Registration charges vary across states, as they fall under the jurisdiction of the respective State Government. The charges are calculated based on either the consideration value or the guidance value, whichever is higher.

In Bengaluru, the applicable charges are as follows:

  • Stamp Duty & Surcharge: 5.1%
  • Registration Fee: 1%
  • Cess: 0.5%
  • Scanning Charges: ₹35 per page
  1. MODT Registration (Memorandum of Deposit of Title Deed)

MODT is a legal document through which the borrower acknowledges that the property’s title documents have been deposited with the bank in exchange for a home loan. These documents include the registered Sale Deed.

This process usually occurs immediately after the Sale Deed registration, at the sub-registrar’s office.

MODT charges are based on the loan sanction amount and include:

  • Stamp Duty: 0.5%
  • Registration Fee: 0.1%
  • Scanning Fee: ₹35 per page

The registered MODT looks like image below

Our Services

We offer comprehensive assistance with:

  • Sale Agreement Adjudication
  • Deed Registration
  • MODT Registration

To avail of our services, please contact us at pgnproperties@gmail.com or WhatsApp us at +91-97424 79020.

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Home Loan

How much time does bank take to return the original documents after closing a home loan?

Approximately 15 Days

Once you have fully repaid your home loan, follow these steps to ensure a smooth retrieval of your original property documents:

  1. Initiate the Request

Immediately after closing your home loan, send an email to your bank branch requesting the return of your original title documents. This will prompt the bank to schedule an appointment for collection.

  1. Collection Timeline

The bank typically provides an appointment within 15 days of receiving your email request.

  1. Collecting Your Documents

Make sure to collect your documents on the scheduled date. However, if you are unable to do so, the bank will hold them at the branch for up to 30 days.

  • If not collected within this period, the documents will be sent back to the bank’s storage center.
  • Retrieving them from storage will require a fresh appointment, which may cause additional delays.
  1. Documents You Will Receive

When collecting your documents, ensure you receive the following:

  • Original Title Documents – Your registered sale deed and other related papers.
  • Discharge/Reconveyance Deed – A legal document stating that the property is now free from the bank’s mortgage.
  1. Assistance with Mortgage Lien Removal

If your property has a registered mortgage lien at the sub-registrar’s office, we offer assistance in removing it. To avail of this service, please WhatsApp us at +91-9742479020.

Thank you for reading!

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Home Loan

How to Close SBI Home Loan and collect documents online as I am not able to visit branch

I presume you might have geographical or time constraints to collect documents from bank. In such situations, You can give Power of Attorney to a trusted source to collect documents from Bank.

Below is the step-by-step procedure to collect documents through Power of Attorney:

Step 1: Once the full and final settlement of home loan is paid, write an email to branch where the loan was sanctioned. In email, mention your loan account number and your intent to collect back title documents through power of attorney. the bank will provide power of attorney template and appointment to collect the documents.

Bank will specify the date, time, and location to collect the documents in email. We usually get an appointment within 15 working days from today

Step 2: Prepare the General Power of Attorney (GPA) draft in word file. The draft looks like below

If you are living in abroad, follow below procedure to make GPA:

  • Print the GPA draft on A4 size paper
  • Affix your passport size photo
  • Meet notary public near you in your country
  • Applicant sign the GPA on all pages + Two witnesses sign at last page + notary seal & attest the GPA
  • Courier the notary-attested GPA and self-attested passport copy to GPA holder in India.
  • GPA holder affix passport-size photo + sign the GPA at last page
  • GPA holder adjudicates the GPA in District registrar’s office. Adjudication should be done in the jurisdiction where the property is located in India.

If you are living In India, follow below procedure to make GPA:

  • Print the GPA draft Rs. 500 non-judicial stamp paper
  • Get the notary attention from notary public in your jurisdiction
  • Courier or hand over the GPA and self-attested aadhaar to your GPA holder

Step 3: On the  appointment day, the GPA holder carries the following documents to bank

  • General Power of Attorney (GPA)
  • Applicant’s self-atested ID Proof (Passport or Aadhar copy)
  • GPA holder self-attested aadhar

And one set of photocopy of above documents

Step 4: The Bank verifies the documents listed in Step 3 and takes the photocopy

Bank hand over the following documents to GPA holder

  • No objection certificate (NOC) on Bank’s letterhead
  • Discharge Deed / Reconveyance Deed  / Release Deed
  • Title documents that include your registered sale deed (Bank will return all the documents that were collected from you at the time of MODT registration)

Step 5: The Reconvenance Deed registration is the process of removing the mortgage lien registered in sub-sregistrar office. The GPA holder must submit an application in sub-registrar office to remove home loan in sub-registrar record. The GPA holder must have following documents to submit an application

  • General Power of Attorney (GPA)
  • No objection certificate issued by bank
  • Discharge / Reconveyance / Release deed issued by bank
  • GPA Holder’s aadhaar

Step 6: The sub-registrar office approves the application within 2-3 working days, pay the government fee (stamp duty and registration fee) and book the slot for registration

In the below example, the property is jointly owned by husband and wife. Wife gave GPA to her husband to collect documents from Bank and register reconveyance deed in sub-registrar office. Refer to below images

 
 

After the Reconvenance Deed registration, Check the Encumbrance certificate (EC) to ascertain the removal of mortgage lien registered in sub-registrar office.

For Example:

On 20th Nov 2010, we registered MODT with SBI, the bank details reflect in Column 6 of below EC, encircled in below image for your reference

On 21st Sep 2022, we registered the Reconveyance Deed, the owner details reflect in Column 6 of below EC, encircled in below image for your reference

Coloum 6 was replaced from bank name to owner’s name in EC. It means that mortgage lien is removed in sub-registrar office

NOTE:

  • When you collect the Reconveyance deed from bank, it’s important to check following info in deed
    • Applicant name
    • GPA Holder Name
    • Loan Account Number
    • Property Schedule
    • Bank’s authorized seal & sign
  • We should register the Reconveyance within 90 days from the day we collect documents from bank or we can approach bank again to rewrite current date, bank’s seals & signs beside the corrections
  • Bank’s representative presence is not required to register the reconveyance deed

In Bangalore, we provide end-to-end assistance to execute General Power of Attorney + collect documents from bank + Register Reconveyance deed + Documents home delivered.

To opt for our service, please write to us pgnproperties@gmail.com or Whatsapp to + 9 1 – 97424 79020.

Thank you for reading…

Categories
Home Loan

How to check mortgage on property in India online?

To check the mortgage on property, Check the ENCUMBRANCE CERTIFICATE (EC). Loan details are reflected in the Encumbrance certificate of the property

For example: I have taken a home loan from Corporation Bank and encircled the bank details in my encumbrance certificate (EC) below.

 

NOTE:

  • Loan details are reflected in EC if the MODT is registered in registrar’s office.
  • Some banks and private lenders don’t register the MODT and they collect the title document from borrower, title document includes Registered Deed.

To check the loan on the property:

  • 1st check the EC
  • 2nd ask the property owner to show the original Registered Deed.

In Karnataka, extract the encumbrance certificate online on Kaveri Online Service https://kaveri.karnataka.gov.in/landing-page

In Karnataka, we provide assistance to extract FORM 15 EC for property verification. To opt for our service, please write to us pgnproperties@gmail.com or Whatsapp to + 9 1 – 97424 79020.

Thank you for reading…

Categories
Home Loan

How do I find out if a property is on a loan or not?

Check the ENCUMBRANCE CERTIFICATE (EC)

Loan details reflect in Encumbrance certificate of the property

For example:  I have taken home loan from Corporation Bank, I have encircled the bank details in my below encumbrance certificate (EC).

NOTE:

  • Loan details reflect in EC only if the MODT registered in registrar office.
  • Some banks and private lenders don’t register the MODT and they just collect the title document from borrower, title document includes Registered Deed.

In order to check the loan on the property:

  • 1st check the EC
  • 2nd ask the property owner to show the original Registered Deed.

In Karnataka, we provide assistance to extract FORM 15 EC for property verification. To opt for our service, please write to us pgnproperties@gmail.com or Whatsapp to + 9 1 – 9 7 4 2 4 7 9 0 2 0.

Thank you for reading…

Categories
Home Loan

How do you find out if there is a loan on a property

When buying or dealing with a property, it’s crucial to verify whether there’s an existing loan or mortgage on it. A property with an outstanding loan can lead to legal complications, so conducting due diligence is essential. In this blog, we’ll guide you through the steps to check if a property has an active loan and how to ensure a smooth transaction.

Check the ENCUMBRANCE CERTIFICATE (EC). Loan details reflect in the Encumbrance certificate of the property

For example: I have taken a home loan from Corporation Bank, I have encircled the bank details in my below encumbrance certificate (EC).

EC

NOTE:

  • Loan details are reflected in EC only if the MODT is registered in registrar’s office.
  • Some banks and private lenders don’t register the MODT and they collect the title document from borrower, title document includes Registered Deed.

To check the loan on the property:

  • 1st check the EC
  • 2nd ask the property owner to show the Registered Deed.

Need Professional Assistance?

At PGN Property Management, we specialize in property verification, due diligence, and legal documentation. Whether you’re buying, selling, or investing in property, our team can help you ensure a smooth and hassle-free process.

Contact Us:

Email: pgnproperties@gmail.com

WhatsApp: +91-97424 79020

Categories
Home Loan

I am selling my house to a buyer taking a home loan. The buyer says I must register the house in his name and hand over all documents to the bank, and I will receive the payment after 2 days. Should I trust this process?

If a buyer is purchasing a property using home loan, the bank representative handover the full and final settlement on registering property in sub-registrar office. Bank representative hand over the final settlement in mode of DD or cheque in sub-registrar office.

You don’t have to wait for 2 days to receive the payment from bank.

Below are the systematic steps to be followed if buyer is opting for home loan.

Step 1: Seller and buyer sign the sale agreement.

At the time of sale agreement signing, seller receives advance payment in the mode of cheque, DD or online account transfer from buyer. The advance payment could be up to 20% of selling price

Step 2: Parties sign the Sale Agreement and buyer apply for home loan

Step 3: Bank approves the loan in around 30 working days. The bank writes the final settlement cheque. The bank’s representative informs buyer that cheque is ready.

Buyer informs seller that final settlement cheque from bank is ready. Seller may visit bank to cross-verify final settlement cheque or ask the bank representative to share the cheque image through email.

Step 4: Seller gives the date for sale deed registration to buyer.

Step 5: Buyer prepares the sale deed draft and share the sale deed draft with seller for cross-verification.

(Generally, the sale deed draft is in word format so draft can be exchanged through email or a messaging app)

In the draft, make sure that bank’s cheque number is mentioned.

Draft should be mutually approved between buyer, seller, bank, and advocate before proceeding with sale deed registration.

Step 6: On the day of registration,

Seller carries the following documents to sub-registrar office

  • Sale deed
  • Encumbrance certificate
  • Latest tax paid receipt
  • Khata certificate and extract
  • PAN
  • Aadhar

Buyer carries the following document to sub-registrar office:

  • Challan (Stamp duty, registration charge and cess)
  • Aadhar
  • PAN

Bank representative carries following documents

  • Final settlement cheque
  • Checklist for original document collection

Step 7: Seller and buyer register the sale deed in sub-registrar office

Step 8: Immediately after the sale deed registration in sub-registrar office, bank representative hands the final settlement cheque to seller.

The seller hands over all the original documents to bank representative

Step 9: Buyer do “Memorandum of Deposit of Title Deed” (MOTD) with bank representative.

NOTE:

  • As a seller, you don’t have to wait for 2 days to receive payment. The payment, original documents and property keys are exchanged immediately after the deed registration in sub-registrar office itself.
  • As a seller, your role completes once you receive payment, handed over the original document and property key to buyer.
  • It’s buyer’s responsibility to deal with his bank for release of loan amount and submission of original documents.

We provide end-to-end seller assistance. To opt for our service, please write to us pgnproperties@gmail.com or Whatsapp to + 91 97424 79020

Thank you for reading…