Preparing for a Smooth Home Loan Closing Process

When people build homes for themselves, they put their lifelong savings into it and often have to apply for a home loan from the bank. These home loans enable individuals and families to purchase residential properties. But with a home loan comes the responsibility to adequately close the loan by returning the amount borrowed and the interest.

Understanding the Closing of a Home Loan

Closing a home loan refers to the final steps and procedures involved in completing the mortgage process and officially obtaining property ownership. A smooth home loan closing process is essential for homebuyers and lenders to complete a mortgage transaction. It involves a series of steps and documentation that must be carefully managed. It involves components like home loan rates, documents, and many other things. 

Closing a home loan is a significant milestone that finalises the purchase of a property, and it’s important for all parties involved to carefully review and understand the documents and terms before signing them. Even in the case of an online home loan, closing is important. Let us learn more about smoothly closing a home loan.

Steps Involved in Closing a Home Loan

A few steps are involved in closing a home loan smoothly and hassle-free. Here are the steps you need to follow to close your home loan:

Obtaining a No Dues Certificate

A no-dues certificate is a document issued by the lender to the borrower upon the closing of a loan. It acts as evidence that the home loan is closed, and there are no further dues or responsibilities related to this home loan now. Even in the case of an online home loan, a no-dues certificate is important. It serves as proof that the borrower has repaid the entire loan amount, along with interest and fees owed to the lender, and there are no outstanding dues or liabilities.

Collecting Original Documents 

When you apply for a loan, the loan is given to you against your property. This property is treated as a mortgage, and the original documents are kept with the lender. While giving the documents, a list of documents (LOD) is given to the borrower. When you close the loan, the lender will return the documents to you by physically matching the LOD and will take your signed-on acknowledgement sheet as proof of handing you the original documents. It happens with online home loans too.

Retaining Unused Post-dated Checks

It is a common practice to demand post-dated checks as security to use in case a borrower fails to make a monthly payment. These are retained if the borrower does not default. It also applies to online home loans. It is better to retain these PDCs while closing the home loan and destroy them to avoid misuse.

Getting updates from Credit Bureau Records

There are four types of credit reports: CIBIL, CRIF, Experian, and Equifax. These track your loan history and should be updated once you close your home or online home loan. Check these reports within 30 to 45 days of closing your home loan. Check whether they have updated the closing of the home loan. If not, contact them, and they will contact you accordingly.

Collecting Non-Encumbrance Certificate 

It is also known as a non-Encumbrance Statement. It is a document that provides information about the property’s ownership and any existing encumbrances or legal liabilities. It confirms that the property is free from any mortgage or legal obligations, such as mortgages, liens, or pending legal disputes. It applies to an online home loan. 

Tracking Your Repayments

It is necessary to track your repayments from time to time. Even if it is an online home loan, getting a repayment history from your lender is necessary. You should make an effort to preserve a copy of this repayment which includes all the major big chunks of payment. It will be useful in situations of disagreement with the lender. It will act as a proof of payment.

Consulting Your Lawyer for Verification

It is always better to verify things than make assumptions. You can obtain a legal-clear certificate from a well-known attorney. Even if it is an online home loan, a legal-clear certificate will not hurt and will act as proof.


Closing a home loan is an important step to complete the loan transaction between the borrower and the lender. It requires attention to detail and a comprehensive understanding of the terms and obligations of a home loan. Closing a home loan brings borrowers closer to owning their dream home and signifies the successful completion of the financing process. Follow the steps mentioned above to make your home loan closing process easy and tension-free.  

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