Home Loan Closure Checklist

Closure of a home loan is a freedom from a big liability. After all, it removes the mortgage tag and the owner can feel that he now fully owns the property. However, there are few important checklists that must be followed at the time of closure.




1) Any original document submitted at the time of availing the loan should be received back.

When processing a new loan, the bank or financial institution asks for some original documents that are kept with them as a part of mortgage policy. Hence it is important to check which documents were given and accordingly be received back from the lender. Also, any bank cheques that were submitted to get the loan, should also be returned to the borrower once the home loan is all cleared.

2) The signature on the acknowledgement should only be done in front of the bank officer after verifying that all documents are in order and proper condition.

The lender would require the borrower’s signatures on an acknowledgement form after delivering him all the documents. Nevertheless, it is vital for the borrower to check that all the documents are in order & proper condition.

3) The no objection certificate should clearly state the address of the property, name of borrower and loan number.

The No Objection Certificate (NOC) is the final document that needs to be received post conclusion of loan. The name of the borrower, address of the property which was mortgaged and account number of the loan have to be necessarily featured on it.

4) Request the lender that CIBIL be informed about loan being cleared.

It is recommended to request the banker/lender to make sure CIBIL is informed about loan closure. In CIBIL records, the loan would then be showed as closed. This will have a positive effect on the CIBIL score. Turnaround time for updating of CIBIL score is around thirty days.

5) Lien should be removed after closure of the loan.

If lien is not removed upon closure of home loan, it can create troubles in near future. A mortgage lien implies that lender cannot sell property if loan conditions are not met. After loan is fully paid back, this has to be removed.

If it is not removed and the property owner now wants to sell, he will have difficulties in doing that. Also a new encumbrance certificate needs to be requested. This certificate should show that the property is free of any loans or encumbrances.

Following the above mentioned steps will ensure that the loan closure has been done properly and there should not be any difficulty in the coming time.