6 Hurdles you can face while transfering your home loan

Sukanya KumarRetailLending.comChinmaya checked with his bank whether they can reduce the rate of interest on his home loan that he took 2 years ago. All his colleagues are taking loan from a new bank on the block and getting it at a 75 basis points lesser than what he is paying now. Chinmaya discussed the matter at home and decided to give a fair chance to his current lender, as doing all paperwork all over again, seemed a little frightening to him.Following are the issues which can come up with Chinmaya:1    Paying fees to reduce rate: Some lenders, instead of reducing the rate of interest in line with the new borrowers, do ask for a fee to do the needful. Better to avoid such lenders. It costs them nothing to re-price your loan. Asking for money to do their duty is not considered an ethical practice.2    Not having a letter of confirmation from previous lender as to what originals they hold: Your lender in most instances does not issue you a receipt of the originals you submit to them. A borrower overlooks it at the time of getting the loan and when the requirement comes up, the lender asks for paperwork, for you to send a request letter, visit them etc., which is completely avoidable.3    Foreclosure letter not clear and interest calculation complicated: A letter issued by your current lender on what principal amount should be paid to foreclose the loan is called a 'foreclosure letter'. Now, obviously, if they issue the letter to you today, your next bank needs a couple of days to prepare the DD and send to your previous lender. In most cases there comes a mismatch due to these couple of days additional interest gets added up. Hence, insist for a clear communication from your previous lender, as to what will be daily interest charged post issuing the letter and calculate the additional amount and add to the principal before your send for closure.4    Time-bound foreclosure letter: In no condition should you accept that. Some banks issue a letter saying that "Your O/s Principal is X and it is valid for next 15 days only.", which is very surprising since the amount can neither be same for 15 days, nor can anyone stop you from repaying your loan on the 16th day!5    Not having anyone to respond when they know that they are losing his business: This is an issue with most. People do not issue the LOD or foreclosure letter quickly, expecting you will get tired of asking and they can retain your business! The fact is, you get more irritated and want to move out even sooner.6    Collecting originals post loan closure becoming a nightmare: Ideally the previous lender is supposed to hand over the original title papers to the new lender directly, but almost in cent percent cases, it does not happen that way. They always either send the papers to the borrower or ask the borrower to visit branch and collect. That is not enough though. They want ALL the borrowers to come together to collect originals and in absence of any, they seek a power of attorney being executed to the person collecting it. Though they all offer 'door-step service' while selling the loan to you and the manager or executive visit you personally to collect the original deed, they show no such servicing interest while your pull out your loan, citing reason 'safety of the documents'.Hence Chinmaya and all you who are planning to switch-over your loan to another lender, be ready to face these hurdles or better be consulting your mortgage adviser and ask the person to handle it carefully for you.Happy loan transferring! Happy documentation!!