How to sell a property with an outstanding loan?

With an already outstanding loan on a property, sometimes it is quite difficult to sell a home. The situations can be different for all as sometimes people would want to shift to another location and maybe at times it may be too difficult for the party to pay the EMIs. :

How to go about it?

1. Take loan from same bank

For the procedure, the new buyer will have to take a loan from the lender from the same bank. While the documents of the property are there with the bank, it becomes easy to continue the same with the remaining installments. While in another case, the buyer can pay part of their property payments directly to the bank to settle the original loan amount and give the remaining property payment to the seller.

2. Take a new loan from another lender:

If the buyer takes a new loan, then the processing time is too longer. Bank will close the original loan and process the new one. Additionally, the buyer will have to pay more money and give unnecessary extra time, which involves documents processing fee, buyers loan eligibility, verification of property papers etc.

3. No loan and settling the payments

If the individual takes no loan, then it is an easy process where the buyer has to pay two payments, one to the bank to close the loan and take back property documents and other to the property lender to pay their dues.

4. Register the property

If the property is not registered, then the bank insists on registering the property after the approval of a loan. If the buyer is going to buy an unregistered property then he will have to settle it with the builder and the seller in a three-way agreement where he will have to pay the property price along with transfer charges, obtain the NOCs and then get the property registered in his name.

5. Home loan

If the buyer is going for a home loan, then the banks will require full documentation of the needed property. If the ownership or the title is not clear, then banks would not approve the loan on those properties. It would be better if the lender and the builder register their sale and after that, a new loan can be taken in consideration with the resale of the property.

In a nutshell, selling a house is not easy. Being careful and understanding the procedures correctly helps saving time and smooth transaction.