Buying a House Already Mortgaged to a Bank

When it comes to buying a house you can consider property under construction, newly built property ready for occupation or look at a house in an ideal location. Chances are that existing house may already be under lien to a bank, its present owner having taken a bank loan. That does not mean you cannot apply for a loan.  The process of loan application is the same as if you are buying new property and you will need to submit all documents as required for a regular bank loan and meet eligibility criteria.  If the existing owner had purchased it from another seller, you would need to obtain relevant papers too.

First, however, you will need to have that particular house cleared of the previous loan. As a buyer you will have to obtain a copy of the set of original property papers from the buyer and submit it to your bank for scrutiny and approval. If you are applying to the same bank as that of the buyer, your application will go through faster. However, the existing loan will have to be paid off before your bank sanctions a loan for you. The previous loan is not transferable. Your bank will grant a loan at the current interest rate depending on the floating or fixed rate option you choose. Either you or the seller may have to make arrangements to repay the existing loan in order to make you eligible for the home loan from your bank.  Consider this aspect when you look at houses already under lien to a bank.