Go for home loan takeover to enjoy more benefits

If you have already taken a home loan from any of the bank or financial institution at a higher rate of interest, you can look for home loan transfer to any of the bank to lower the burden of your home loan.  You can anytime switch your home loan from existing home loan lender to a new lender. Home loan transfer is easy and simple to avail and you can contact to any bank, which is offering this facility. However, banks charge a fee for acquiring your loan from the existing lender and to complete the take over formalities. Takeover of home loan is beneficial to lower your total outgo as interest in the home loan. It helps in saving huge money over the period of time. If the new lender is charging you a lower amount as processing fee and you are paying just a few thousand of rupees in the whole takeover process and your saving is in lakhs then it is a good deal to switch your home loan. You should always compare and negotiate with the bank to get the lower rate of interest on the new loan on flexible terms. Always, read the terms and conditions of the loan and find out the add-on products or any investment conditions related with the loan before availing it. Most of the banks offer home loan transfer facility to customers. You can any time transfer your home loan to other banks at a competitive rate of interest. It takes over your existing home loan from your lender.

Which are the financial institutions eligible for home loan takeover?

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The bank will take over the home loan from any of the private or foreign bank. Home loan taken from Housing Finance Companies (HFCs) registered with National Housing Bank (NHB) are also eligible for loan take over. Employees of central/state govt. or undertaking or public sector undertaking are eligible for home loan takeover facility.

Eligibility criteria for loan takeover facility

  • Borrowers who want to avail this loan takeover facility should meet the basic eligibility criteria for availing home loan as per the bank’s instructions.
  • The borrower must have paid interest and installments of the existing loan regularly as per the existing bank’s terms.
  • The borrower must have all valid and relevant documents evidencing the title to the house/flat.

Higher loan amount with extended period

The bank offers higher loan amount than your existing loan based on the eligibility and customer’s profile. The bank may sanction you an amount higher than the existing loan for a longer period. You can utilise the amount for the purpose of renovation/extension/furnishing. However, the extended term of the tenure depends upon the bank’s scheme and the eligibility criteria of the takeover facility.

Loan takeover procedure

  • The loan borrower should write a letter addressing the bank/financial institutions from whom he/she has availed the loan asking them to deliver immediately upon the receipt of the loan amount, the title deeds and other securities, if any, direct to their lending branch.
  • The borrower should give to the branch a request letter for paying to his lending bank/financial institution the outstanding amount of his loan by debit to his loan account.
  • The borrower must give an advice to the actual outstanding in the loan account from the other bank/financial institutions.
  • The borrower should deposit the statement of the account for the entire period or for at least last 10-12 months where the loan has run for a longer period.
  • Confirmation letter from the financing bank they have created equitable mortgage over the property.
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Documents required for the loan process

The disbursal of the loan amount will be done only after meeting the eligibility criteria of the home loan takeover process and completing all the formalities in this regard. To complete this process of the takeover you are supposed to submit some documents such as:

  • Agreement to create mortgage
  • Power of attorney in the favour of the bank authorizing it to create equitable mortgage on the borrower’s behalf.
  • Interim security for instance; bank deposit receipt, LIC policies, etc., and the securities obtained in the interim period will be released after receipt of the title deeds then the other bank and creation of a valid equitable mortgage subsequent to verification of the borrower’s title to the property.
  • Required loan documents

Home loan Top up facility

Home loan with top up loan can be taken over subject to maximum Loan To Value (LTV) of 75% and fulfillment of the other terms and conditions of takeover.

Additional Readings: Enjoy higher transparency and lower rates with SBI home loan

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  • Home Loan Interest Rates October 2023
    Axis Bank8.75% - 9.15%
    Bank of Baroda8.50% - 10.60%
    Citibank8.75% - 9.15%
    HDFC8.50% - 9.40%
    ICICI Bank9.00% - 9.85%
    Indiabulls Housing Finance Limited8.65%
    Kotak Bank8.85% - 9.40%
    LIC Housing8.50% - 10.50%
    Piramal Capital & Housing Finance10.50%
    PNB Housing Finance8.50% - 10.95%
    Reliance Home Finance8.75% - 14.00%
    State Bank of India/SBI9.10% - 9.65%
    Tata Capital8.95% - 12.00%
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