how to sale home with an existing loan on the property

Planning to sell your house but have an outstanding loan to pay? Here are a few options that can help you with the sale of your home, even when you have an outstanding loan against it. The first option is when the buyer pays from his own savings. In this process, the seller can request the bank to provide a loan outstanding certificate. In return, the buyer can directly pay the down payment to the seller's loan account. So, when the liability is cleared, the bank will hand over the property documents to the seller. Thereafter, the seller will transfer the property in the name of the buyer. The second option is when the buyer takes home loan from the seller’s lender. In such situations, the buyer, the seller, and the bank will enter into the tripartite agreement.


If a buyer’s home loan is approved, the amount required to settle the loan of the seller is taken care of and the residual amount is given to the seller. Lastly, the buyer can also take a loan from a different lender. The seller will request his bank for loan outstanding certificate along with the list of property documents. The buyer's bank issues a cheque in favour of seller's bank bearing the outstanding loan amount. Once the loan amount is settled, the seller’s bank will hand over the property documents to the buyer’s bank. Thereafter, the remaining loan amount is disbursed. So, if you are planning to sell off your property with an outstanding balance, just follow the above-mentioned steps. Also, keep all the important documents in order to sell off your property with ease.

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