Foreclosing Home loan in wife’s name

POSTED BY Anshul Gupta ON March 20, 2013 9:55 am COMMENTS (6)

Hi All,

Generally finance companies charge a penalty of 1-2% if home loan is foreclosed from funds raised through “other sources”. I understand this is to safeguard their interest in case borrower decides for a balance transfer to some other bank.

However, I would like to know if the income of the husband will also be treated as “other source” if utilised in clearing the home loan in wife’s name and subjected to 1-2% penalty.

Regards,

6 replies on this article “Foreclosing Home loan in wife’s name”

  1. Dear Anshul, please check with LIC, there are some disputes related to this fixed v/s floating thing for applying forclosure charges.

    thanks

    Ashal

  2. Anshul Gupta says:

    Ashal, I just checked the circular. Penalty is waived off for floating interest loans only . For fixed interest rates plans, banks/housing companies are free to penalize as per their policy.

    LIC HFL is offerring fixed rate for 2 years which converts to floating after 2 years. So, the penalty is waived off only after 2 years.

    Regards

  3. Anshul Gupta says:

    Thanks Ashal. Will google for NHB circular.

  4. Dear Anshul, initial 6 months prepayment lock-in is different thing & forclosure charges are different thing. Please google for NHB circular on penalty waiver. Here NHB stands for national housing bank, the governing agency for home loan finance compnaies like HDFC, LICHFC, Deawn housing, Indiabulls.

    Thanks

    Ashal

  5. Anshul Gupta says:

    Really?? I have a received a sanction letter from LIC MFL stating 2% penalty on foreclosure.

    Also, there is a lock-in period of 6 months if I want to make a part payment.

    Regards,

  6. Dear Anshul, the foreclosure charges have been stopped due to directives from both RBI & NHB.

    Please feel free to pay out with out any penalty. You may park all the funds from your account to your wife’s account & later on your wife can pay from her account to the loan closure.

    Thanks

    Ashal

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