I'm purchasing a house and there is a existing loan on that with the owner. can i get a house loan on that?

Question

i'm purchasing a house. there is a ongoing loan from LIC on that property with the current owner. now he can not preclose it. so i'm stuck with to transfer the loan on myself. i want to transfer this to idbi bank. can someone explain how to do this? again how would a bank loan me if the existing loan is not closed.

Answer 1

Best Answer - Chosen by Asker

It's very simple......First thing u should keep in mind is that the present owner is having the loan on that property not u...And u r buying his house.So, no problem.

Second thing is that u r simply buying that house...Say for example u finalize the deal for 50 lacks.And the outstanding loan on that house at present is say 20 lacks...

O.K

Now u apply a fresh housing loan in IDBI for buying that house in 50 lacks.After applying, bank will send a surveyor to the house for making a valuation report of that house.Say, he values the house present value as 70 lacks.

Then u'll submit all the necessary papers,cheques etc to the bank....Now, the bank will send ur file for approval of 50 lacks in their head-office.After some days u got ur approval.

Now, the main answer for ur question is - After getting the approval from head-office bank will make 2 cheques.

1st cheque will be made in the name of LIC & the amount will be 20 lacks..U go to LIC along with the present owner carrying 20 lacks cheque from IDBI.They will take the cheque & will call u after some days for giving u the registry paper of the house.

The day when LIC asked u to come u go to them & collect the registry paper...Bring that registry paper & submit to IDBI.

Next day u will be asked to do the resgistry for the house in ur name.On the registry date u will register the house in ur name & then IDBI will make a new cheque in the name of the present owner for the rest of the amount i.e 30 lacks...

This way 50 lack will be distributed.

Remember, present loan on the house will not effect ur fresh loan in any case.

At last heres a personal suggestion by me - Go for SBI home loan instead of IDBI....because it's the best in every manner.Interest rates r very less in comparison to IDBI.Moreover the best part because of which I prefer NATIONALISE bank is that if u make a gap in EMI say ur 4 installments r due.Then IDBI will take the help of recovery agents,court etc..etc but in NATIONALISED bank u can simply talk with the manager & can even convenience him in 1 installment.What I'm trying to say is that in nationalise bank the feature I love is flexibility they offer.If u have keep good terms with manager he can help u alot.But in private banks there r no chance.

There is 1 good example I must share with u...My cousin has a housing loan from PNB .He failed paying EMIS for nearly 11 months.No action was taken against him, only he got 2 notices from the bank.What he did is ki his terms with the manager was good.And he got that benefit.Now he has regularise the account.If he had that loan from a private bank then for sure he was out from his own house....Always trust with NATIONALISE bank.....

And the most important thing u will get is less EMI amount in NATIONALISE bank like sbi than IDBI..The choice is completely urs...

Best of luck !!

Asker's Rating:

Asker's Comment:

thanks' it was simply great and guess what the same is happening in my case.

Answer 2

No problem!

You can get a letter from the LIC regarding the outstanding balance amount. You can apply housing loan in your bank with that details.

Your bank, out of the sanctioned loan, they will clear the LIC loan and make balance payment if any to your seller. It is the general practice among banks and you apply.

Answer 3

Loan cannot be transferred.So long old loans are not paid no other institution will finance the same property not even ID BI.So Lic can only give the solution which will be mentioned in the sale agreement.Or take a list from LIC about the cureent loan amount due this you deduct from the payment and pay the instalment your self.

Answer 4

that makes no sense - the seller is going to have to pay off ALL loans in order for you to buy the house with clear title - that 2nd loan is NOT your problem - it is the sellers problem and he cannot make you take it over

Answer 5

You must get a new loan and this will pay off the existing one. Loans are not transferable.

Answer 6

In the US it would be a mortgage assumption. And it pretty much doesn't happen any more.