Can You Sell A Home With An Outstanding Home Loan?

Do you want to sell your home? Is there a debt on it that needs to be paid off? The extra home with an outstanding loan is the first choice to be dropped from the investment portfolio when money is tight. Yes, a person who has taken out a home loan on a property will be able to sell it. The selling agreement, on the other hand, requires obtaining a NOC from the lender or in-principle approval from the lender. It is important to notify your bank of your plans to sell the property and that you have started the process. Following that, you will receive a letter from the bank detailing the balance owed on your loan. This serves as substantial evidence of ownership for the property you own. If youre in a financial bind or need to sell your home quickly for a variety of reasons, there are a few scenarios to consider before selling a home with an unpaid loan: If the buyer obtains a loan from the same lender, a tripartite arrangement is established between the buyer, lender, and seller. The number of checks needed is limited, making it simpler for all parties involved. The only background check needed is for the buyer to determine his loan eligibility. The lender will consider the buyers loan eligibility; if accepted, the amount needed to pay off the sellers loan will be paid off, and the remaining amount will be turned over to the seller. The buyer is responsible for the processing fee.Advertisement If the buyer goes to a different bank to get a loan, theyll need to bring copies of all the relevant documents, as well as the letter from the sellers bank detailing the sellers outstanding liability. The bank will issue a cheque in favor of the sellers bank, paying off all the dues, after following the normal protocol. The remaining sum will be released to the seller after the sellers bank issues the property papers and the buyer submits them to his bank.If the buyer has already been pre-approved for a loan from another lender, the seller must submit a loan outstanding certificate from the bank, as well as a list of the banks property records. If the loan is accepted, the buyers bank will be able to issue the sellers bank with the remaining loan sum. When the loan is completely paid off, the bank releases property papers, which are then sent to the buyers bank.The remaining loan amount is only released after that. A buyer will pay the down payment directly to the sellers loan account in exchange. The bank will hand over the records once the funds have cleared. The seller must then move the property to the buyers name until the documents have been obtained. The remaining balance is to be agreed solely between the buyer and the seller. Mother deedSale deedDocuments of home loan sanctioningSociety NOCEncumbrance CertificateProperty Tax receipts, if anyHousing society share certificate If you sell your home within a year of buying it, youll have to pay the Short-Term Capital Gains (STCG) tax on the income you make. Since STCG is taxed as ordinary income tax, it ranges from 10% to 37 percent depending on the income bracket.If you sell your property after one year of buying it, youll have to pay the Long Term Capital Gains Tax (LTCG) on the income you make. Depending on your salary, this can be as low as 0%, as high as 10%, or as high as 15%. If the proceeds are used to purchase another home, the LTCG tax will help you save up to 19.5 percent on your regular income tax.The new property could have been purchased a year before or two years after the old one was sold. If the property is sold after two years, the profit earned on the sale will be taxed as long-term capital gains (LTCG). This income is subject to a 20% tax rate.