A mortgaged property is one that has
already been used as collateral by the owner, for a mortgage loan that is still
unpaid. Buying a mortgage property is often a good deal for both the buyer and
the seller. The buyer gets a great deal on a property that has already been
verified and evaluated, by a bank or NBFC, when the seller applied for his
mortgage loan. And the seller gets a chance to clearing his loan against
property or mortgage loan with the money he receives from the sale.
Finding a mortgage property is not a
problem, since mortgage loan interest rates are so low, people often opt for
this type of loan. But buying a mortgage property or a property against which a
loan against property has been taken, can be a
difficult task, especially when the buyer needs to get a loan to purchase it.
The buyer obviously cannot opt for loan against property for this property, he
also cannot get a loan with bank until the seller’s mortgage loan is cleared.
This isn’t as confusing as it seems
though, here’s a step by step guide to help you purchase mortgage property of
your own.
1. Get all documents from the
seller up front: Ask for all the deeds and stamp duty papers or copies of them,
from the seller, to ensure the property is indeed in their name. If the
property has be sold and resold a number of times before, you can ask for all
the deeds as well. The bank will release the deeds of the current property only
when the loan against property is repaid, meanwhile you can make do with
photocopies of the same.
2. Close the ongoing loan:
This is where the deal gets a little a tricky. The easiest way to do this is to
use your own funds to pay the seller so he can close his ongoing mortgage loan.
This possible only if the outstanding loan about is small.
The second way to do this is to opt for a loan with the same bank where the
seller has an ongoing loan against property. You ask the bank to close the
sellers’ loan against your loan, so in a way you’re taking over his mortgage
loan. In both these cases transfer of the property is simple.
The
third way to do this is to opt for a home loan with a different bank.
You can then close the loan with the seller’s bank by using this money. This
process is a little confusing and complicated. You need to get a NOC from the seller’s
bank as this loan too will be for the same property.
If you go about it in a systematic way buying a
mortgage property can be profitable to both parties.
