Vikas Gawri's Secret to Safely Buying a House Without Loan Surprises

One of the main factors when purchasing a house is verifying that the property is clear of any hidden debts or loans. Usually, the issue occurs later, when the buyer discovers that the property he acquired already had a debt on it, and the bank knocks on his door demanding payment. To avoid such issues, finance expert Vikas Gawri explains how you can determine whether your property is loan-free before purchasing it.

Why It Happens

Many sellers will tell potential buyers that everything is fine and the property has no loans. Some may go as far as to tell the buyer that there are no liabilities.

But, regardless of how convincing the seller appears to be and how close your relationship is with them, never put a blind belief in that information. A seller's primary goal is to make a sale, and the last thing you want is to buy a property that still carries a financial burden.

How to Know If a Property Has a Loan

To avoid coming across such a situation easily, you can check whether or not a property has some loans or mortgages against it using a government service called CERSAI. This maintains all records of loans and mortgages in India.

Here's how you can use CERSAI to check:

• Visit the CERSAI Website: Go to the official CERSAI website.
• Once you are on the website, you should select the right categories for the asset. For property-related checks, choose the "immovable property" category. Check the Property Details: Once you have selected your categories, the system will indicate if any loan is tied to the property. If no results are found, this means that there is no loan or mortgage associated with that property.

Why You Should Use CERSAI 

Before the CERSAI system was implemented, determining if a property had any loans was complicated and time-consuming. Many purchasers were unaware of the risks associated with purchasing houses with existing loans. This might result in major issues, such as the buyer being bound to pay off the outstanding loan balance, even if they were unaware of it at the time of purchase. 

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The Government of India established CERSAI as a help to ensure consumers do not fall into fraudulent traps. The principal motive of CERSAI is to limit the prospects of fraudulent deals in cases related to property loans. The system stores detailed information about mortgages and loans, making it easier for buyers to verify the status of a property before finalizing the deal.