Sometimes there can be a requirement of some immediate money during the process of renovation or construction of a home. In such cases you will require a home loan top up from your current money lender. Often, financial institutions do not disburse top up loans to their borrowers. In such situations transferring your outstanding loan amount to a new lender would be a wise decision to make. Also if you are finding it difficult to repay the loan at the current interest rate offered by your money lender then you can find a new money lending company that offers a lower interest on home loan rates on the loan amount. All you have to do is transfer your home loan to the new money lending company.
Let us see the home loan transfer process below:
Step 1- Firstly, to transfer your balance from your current money lender to a new money lender you have to get hold of the documents that is required to refinance the loan. For that you need to request your current lender for the documents.
Step 2- When your current moneylender issues a consenting letter with the outstanding loan amount you have to take these documents to the new lender. The new lender will then study your outstanding loan and decide upon the tenure, interest rate and the amount of top up loan you are eligible for.
Step 3- On approval and verification of your documents the new money lender will pay the outstanding loan amount to your old lender.
Step 4- On receiving of the payment the old lender will now close your loan account with them.
Step 5- Once the old loan account is closed the old lender will handover all the property papers to the new lender and the refinancing process will be completed. From then all future payments will be made to the new lender with effect to their interest rate.
What is the eligibility criteria for home loan balance transfer?
There is also a set of eligibility criteria that you have to fulfill in order to be able to transfer your loan to a new lender. Some of the following requirements are:
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- Your age must not be less than 21 years and not above 60 years at the time of application. For self employed individuals the maximum age is 65 years.
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- The loan amount applicable is dependent upon a number of factors which include the age of an applicant, the present income, number of co applicants involved, debt, the retirement age of the applicant etc.
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- There must be a clear history of 12 to 18 months of repayment on the applicants existing home loan. Your balance transfer can be denied if you’re found defaulter & will earn a negative point.
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- The applicant should have minimum work experience of 2 years and at least one year in the current organization. For self employed individuals the business should have two years of existence in the same field of service.
- Your credit history will also play a major role in the approval of home loan balance transfer. Credit report score of less than 700 points will be considered as a drawback.
