Home loan balance transfer is a process where the home loan of a particular borrower is transferred from one bank to another, usually for a lower rate of interest. The new bank will pay off the loan in entirety to the existing bank, and all future home loan payments will have to be paid towards the new bank after the home loan transfer.
In case of an internal home loan balance transfer, it is a process where the home loan is transferred to another individual within the same bank. Let’s say that you have an existing home loan with a particular bank and would like to sell your house. At the same time, the buyer of the property would like to avail a loan to make the purchase. Instead of having to close your existing loan, and the buyer having to apply for another loan, the buyer simply takes over the existing loan. This is known as internal home loan balance transfer.
In case of an internal home loan balance transfer, it is a process where the home loan is transferred to another individual within the same bank. Let’s say that you have an existing home loan with a particular bank and would like to sell your house. At the same time, the buyer of the property would like to avail a loan to make the purchase. Instead of having to close your existing loan, and the buyer having to apply for another loan, the buyer simply takes over the existing loan. This is known as internal home loan balance transfer.
Requirements to internally transfer your home loan
- A letter of consent from the existing borrower to foreclose his loan in lieu of the property being sold
- A loan application form that is duly filled by the new owner of the property
- The processing fee for the loan must be provided to the bank
- No objection certificate from the developer
- Any prepayment charges will have to be borne by the new owner
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