Check list of documents to secure after closing your home loan

Completing the home loan closure process involves more than just paying off the loan; it requires careful attention to detail in collecting and verifying essential documents

After successfully closing a home loan, homeowners experience a big sense of relief, and accomplishment. But you will still need to take a few rounds of banks. Here’s a comprehensive guide on the essential documents to gather and steps to take after closing a home loan.

Original property documents:

 

After the loan closure, it is essential to collect all the original documents that were submitted to the lender at the time of securing the loan.

No Dues certificate (NDC):

 

A ‘No Dues’ certificate is an official piece of document confirming that you have no outstanding dues with your lender. Collecting this certificate is important because it serves as tangible evidence that your loan has been fully settled. This document may be required in various scenarios, such as applying for another loan or selling your property. Having it on hand prevents potential complications down the line.

 

 

Removal of lien:

 

When you take out a mortgage, a lien is placed on your property as security for the loan. After you pay off the loan, it is essential to ensure that this lien is formally removed. Collecting the necessary documentation confirming the lien’s release is crucial for maintaining unimpeded ownership. Without this, you may encounter difficulties in selling the property or obtaining future financing. 

 

Updated non-encumbrance certificate:

 

The non-encumbrance certificate (NEC) is a vital legal document that records all financial transactions related to the property. After loan repayment, ensure that the NEC reflects the closure of the loan, indicating that there are no outstanding claims against the property. 

 

Loan repayment statements:

 

Collect all bank statements related to the loan repayments. These statements serve as proof of payment and can be crucial in case of any disputes regarding the loan closure. 

 

Post-Dated Cheques:

 

If you provided post-dated cheques at the time of taking the loan, ensure that these are collected back from the bank once the loan is fully repaid. 

 

“Collecting all documents after closing your home loan is not just a formality; it is a critical step in safeguarding your investment and ensuring peace of mind. By obtaining original documents, a ‘No Dues’ certificate, lien release confirmations, updated non-encumbrance certificates, and verifying your credit records, you can solidify your ownership and protect your financial future. Taking these steps will empower you as a homeowner and allow you to fully enjoy the benefits of your hard-earned achievement,” said Siddartha Karnani, Partner, King Stubb & Kasiva, Advocates and Attorneys.

 

Your credit records should accurately reflect that your home loan has been paid off. Ensuring your credit report is updated is important for maintaining a good credit score, which is essential for future borrowing opportunities. Collecting documentation that confirms the closure of your loan helps protect your credit reputation and allows you to leverage better financial terms in the future.