For those who are not aware of what a home loan balance transfer is, it involves transferring a borrower’s outstanding loan amount from one lender to another. Borrowers who choose to transfer their home loans to different financial institutions do so for various reasons such as getting a lower home loan balance transfer interest rate, better repayment tenure, or even a top-up loan.
While a home loan balance transfer can be a great move, it is very important to keep certain things in mind. Borrowers need to be aware of the process of a home loan balance transfer to avoid any complications, as this could simply cause a problem.
Take a look at 5 hurdles that every borrower should be aware of while applying for a home loan balance transfer:
1. Be aware of the processing fee involved in a home loan balance transfer
A lot of people are unaware of the fact that there could be an additional fee involved in transferring their home loans. Most financial institutions levy a processing fee for carrying out a home loan balance transfer. Now, it is very important to include this fee while calculating expenses to understand the exact amount you end up saving by refinancing the home loan.
2. Keep all the required documents ready to submit to the new lender
Many borrowers complain about the documentation processes that financial institutions have in place. While this process can take time, it does not necessarily have to be so tedious. It is ideal to check with the lender regarding the documents required for a home loan balance transfer beforehand. This will ensure that there are no hassles in completing the documentation process.
3. Make sure to get the No Objection Certificate (NOC) from the existing lender
In some cases, the current financial institution might delay submitting the NOC to the borrower. Now, this is a serious problem as the new lender will require this certificate in order to transfer the home loan. This is why you should ensure that the current lender gives the NOC on time in order to avoid any unnecessary problems.
4. Inquire whether the new lender requires the co-borrower’s approval
If you have a home loan with a co-borrower, make sure to check with the new lender on whether they are needed at the time of transferring the loan. If the co-borrower is living in another city, this could be a problem as they might not be available to complete the formalities. This is why it is better to be aware of the new lender’s terms and conditions beforehand.
5. Avoid transferring the loan without first using a home loan balance transfer EMI calculator
It is always advisable to first make use of a home loan balance transfer EMI calculator before refinancing a home loan. This is to get an understanding of the revised EMI payments, which will help in deciding whether to go ahead with the transfer.
Once these things are kept in mind, one can easily avoid any unnecessary hassles while transferring their home loan to a new lender and ensure a smooth process.
