Is it safe to buy a flat under mortgage over defaulted loan?- Property Hotline

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Expert: Harsh Roongta, Chartered Accountant, and a SEBI registered Investment Advisor.



Question: Is it safe to buy a flat which is under mortgage due to defaulted bank loan? If so what is the procedure? The seller says that I should pay the loan amount and the bank will return the originals only after a week of doing so.



Answer: Yes. You should take a letter from the bank mentioning the exact amount at a future date by which the entire outstanding loan will be paid off. Also, it should mention the amounts payable per day post this dates if the loan is paid back after that date. The bank will also list the documents to title in their custody. You can enter into a sale agreement with the seller on a condition that once the bank releases the documents of title to the property the balance of the amount towards the cost of the property will be paid by you to him. You can then directly make payment of the outstanding loan amount to the bank. You can make the balance payment of the property value against the original documents and possession of the property.