Can you sell a property while repaying EMIs?

  • Harsh Roongta
  • Updated: Jan 13, 2016 18:05 IST
Banks usually give time to customers to close the home loan if they intend selling the property for which they have taken a loan. (iStock)

I took a home loan for purchasing a flat as an investment. I’ve been paying EMIs regularly. Can I sell the flat while the loan repayment process is still on?

– Aayush Tripathi

You cannot sell the flat unless you repay the existing loan. However, the bank may grant you some time to pay the amount. In this case, the bank will provide you with a letter mentioning the amount you are required to pay. The bank will hand over all the property documents once you have paid the said amount. The amount stated will be as of a future date and will include the interest till that date. As part of your sale agreement with the new buyer, you will be required to hand over the original documents of your property. However, in case the buyer also wants to take a loan for purchase of the property, both the banks can agree on modalities to be followed to enable the transaction to go through smoothly.

I plan to construct a house on an ancestral plot. The ownership is in the name of my father. I intend to pay monthly EMIs. I have a brother and a sister. Will the bank ask for any documents or signatures from my brother or sister?

– Rajiv Saxena

Since you intend to take the loan and the property belongs to your father, he will have to be the applicant for the loan with you as the co-applicant. If you are not the co-owner of the said property, you will not be able to claim any tax benefits on the loan taken for this purpose. The bank may ask for a declaration from your brother and sister stating they have no interest in the property if, as per the inheritance laws, they are entitled to a share in the property after the death of your father. The ownership interest of your father could be limited due to the inheritance laws applicable to you.

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