What is the process to resell a flat? Currently I have bought an underconstruction flat and have taken a home loan from a private bank.
— Mukul Joshi Yes, you can sell the apartment, but you will need the lender’s consent. This consent letter will typically provide the amount, on payment of which the outstanding loan liability will stand discharged.
This amount includes the prepayment charge, if any, chargeable by your lender and should list the documents held by them that will be released on payment of the stated amount. This amount mentioned in the certificate is typically calculated as on a future date, to enable time for you to arrange the payment from the buyer.
After the payment of all dues, the lender will return your original documents and issuea loan closure letter indicating that there is no outstanding amount to be paid. Please make sure you get the no dues certificate to obviate any issues in the future. The buyer can make payment of the balance sum on receipt of the original documents from the bank.
In your case, since the flat is still under construction you may also require a NOC from the builder /developer for which he may charge you a fee or may not even give the NOC as it affects his own sale of flats in the same building. I am looking for a home loan. Are there any banks which give a mora- torium period or an option such that the EMI starts after a year of the loan disbursement?
—Renu Dikshit To the best of our knowledge, there isn’t any bank which provides moratorium for home loans. Most lenders offer construction- linked loan plans wherein you pay the simple interest for the period of construction (also known as pre EMI interest) and the EMI starts upon completion of construction. Lenders are choosy about which under-construction project they will fund. So make sure that the project you select is approved by the lender of your choice. Of course some builders offer you schemes where they will bear this pre EMI interest amount during the construction period. This is a separate arrangement between you and the builder and if the builder doesn’t pay the pre EMI interest to the bank you will have to still pay the same to the bank. If a bank approves a property, what does this mean legally? Can we trust that property and say that this property has no legal cases?
—Swati Singh When a bank has approved a property, it means that the bank is prima facie satisfied about the legal title of the property and that the construction of the property has been carried out in compliance with the local regulations and approvals. However, the ultimately liability for the title shall remain with the buyer and not the bank. It is for the purpose of quick approval of the loans that builders seek pre-approval of banks for their projects. So, whilst the bank’s approval is prima facie a good indicator, it is in your interest to carry out your own due diligence.