If you have an existing home loan taken a few years back and see the interest rate at which current home loans are being offered, it is quite natural to feel disappointed. However, this does not mean that you have to miss out on the low interest rates being offered today. Your plan can always be transferred to a new lender that agrees to offer better terms, which is called a home loan balance transfer. This is something that many borrowers do, not just for a lower home loan balance transfer interest rate, but also for other reasons such as getting a top-up loan or a more suitable repayment tenure.
Now, if you are interested in opting for this transfer, it is important to be aware of the documentation process. This process can take a lot of time if a borrower is not prepared with the documents that are required by the lender. So, here is a list of documents required for home loan balance transfer that need to be kept ready:
- Consent letter
For a home loan transfer, you will need to send an application to the current lender requesting a consent letter.
- Loan agreement
You will need to collect a sanction letter or loan agreement from the current lender, as the new one will need it.
- No Objection Certificate (NOC)
A NOC has to be provided by the current lender, which states they have no objection to transfer the outstanding loan amount to the new lender.
- Documents for proof of address
Documents for proof of address include passport, Aadhaar card, voter ID, and/or driving license.
- Documents for proof of identity
Documents for proof of identity include voter ID, PAN card, driving license, Aadhaar card, or employment ID that has been issued by NREGA.
- Property documents
Property documents will have to be collected from the previous lender and submitted to the new one.
- Foreclosure letter
The foreclosure letter is important to ensure that there is no outstanding amount left to be cleared. It includes the date on which the home loan was foreclosed. After the current lender receives the outstanding loan amount, they will provide you with this letter.
- Financial documents
Financial documents will include Form 16, latest salary slips, and bank statements of the past 6 months. The new lender requires these documents to make sure of your income sources and to understand your repayment capacity.
- Post-dated cheques
You have given post-dated cheques to the current lender while taking the home loan. These cheques are to be collected from them if you are opting for a home loan balance transfer.
- Home loan statement
This statement shows all the EMI payments as well as the outstanding debt. This statement is needed to be collected from the current lender and given to the new one.
This is a general list of documents that most financial institutions need for a home loan refinance. Do keep in mind that these requirements could differ as per each lender, so it is best to check with the lender before beginning the documentation process.
