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18 March 2011

Seller has not Cleared Home Loan?

Purchasing a new house directly from the builder makes you prepare about all the aspects we have discussed in my previous posts. What if you are buying an old flat? Moreso if the seller has not cleared the home loan? In case of purhsing a flat that is already purchased by another buyer there are certain points one must remember before signing on the dotted line.
Never ever go in immediately for such a purchase. Because if the seller has not cleared the dues then the repayment of loan schedule is bound to be carried forward. The seller may assure you that the payments will be made when you give the amount of the flat but there is no such guarantee. You may purchase the flat and later the seller may not keep his promise then you are in a soup! Though they may be genuine cases but financial problems and other debts also will make their situation tight. That to if you need to go in for a home loan then you end up in a mess! Though the seller of the flat may be willing to pay the dues, it may take some time and sometimes months to clear off the previous loan. Even loan shifting, clearing has certain procedures and penalties that the seller will have to bear. Unless all this is cleared the title of the house is not in the name of the seller. The home loan lender still has rights on the flat and this will totally be owned by the seller only when,  their home loan is cleared to full.
Many times such sellers may compromise on the rates and you may get these flats at a cheaper rate. You will also be assured that as soon as you make the payment partly they will clear their home loan. Also remember that the original papers of the flat will be with the loan lending institution only. Unless the total loan is paid off the papers remain with the lender and the owner of such a flat has no legal rights to sell the flat.
Negotiate on such deals well as here you know that the seller is in dire need of funds. If you are lucky you may get a good deal on the house purchase. Consider how many EMIs are remaining and the total amount of the loan cleared.Take legal advice of a lawyer or financial consultant for any financial matters as you may not be aware of all these paper works and documents required in a home purchase..
If you consider making such a purchase then peruse the whole situation carefully. The seller if known  and reliable then you can calculate the remaining amount of the loan. The interest rate that has to be paid on this amount also has to be considered. Now consider the deal and put an appropriate offer. Always any home deal will be in your best benefit if you study the case carefully and not go in for an emotional decision in a hurry. Unless this is  a good bargain there is no need to go in for such a purchase. You must know the rates of new and old flats available in that particular area beofre coming up with an offer price.
Such offer can benefit the purchaser as you may be very lucky to get the place in a lesser rate as comapred to the rate of that area. You can also negotiate on the repairing and leakages and other maintainence required in the flat. So again here you save. But totally this deal will take more time as compared to a new purchase as the previous loan has to be cleared before you getting a new home loan.

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