Process to Gift a Mortgaged Property?

Nithya Ramani Iyer

16 August 2023

8,512 4 mins read

In this article, you will learn how easily one can mortgage their property to avail of a loan and its related information.

Certain conditions apply whenever you want to gift, inherit or get a mortgaged property through your will. Gift a Mortgaged Property and It is being stated that in the case of a gift deed, one can share their house, land, property and other things with a relative, but there is such mention of gifting a mortgaged property.

Even inheritance can be used to transfer a mortgaged property. The Mortgage Lien on the property will be transferred to the owner’s dependents, such as children and spouses, in the event of the owner’s untimely death and failure to pay the outstanding debts. When this occurs, the family member may obtain the mortgaged property by paying off any unpaid debt.

But there is no such restriction to it. You can do that, but certain conditions need to be fulfilled.

How can someone inherit or gift a property that is mortgaged? This article will discuss how an individual can inherit, gift or give away a mortgaged property by satisfying only the conditions.

Table of Contents

What Does the Term ‘Mortgage’ Mean?

When one is ready to take a loan in exchange for a property, it can be termed a Mortgage. Here the party is ready to keep the property as the house or land at stake. This property is known as a mortgaged property.

Once the lender pays off the loan, the Property deed which is mortgaged can be freed.

What Are the Conditions for Gifting?

Once the dues are cleared, an individual can gift the Mortgage Lien on the property to anyone.
One who is the receiver has to clear the for the property means he has to take this extra burden after the mortgaged property is gifted.
After clearing all the dues, the receiver can only benefit from the mortgaged property.

What Are the Properties Included Under Gift?

An individual is not bound to gift anything with the aid of a gift deed. It includes only specific things that you might gift with the help of a gift deed. Suppose, for example, a widow, after the death of her husband, is only liable to gift the property she has acquired from him.

The widow can’t gift her whole property to the receiver as she would be left with nothing else for herself. In a similar situation, an individual can gift any self- acquired property when he/she still remains the earning member. Hence, the conditions are bound to vary based on the circumstances.

What Is the Difference Between a Gift Deed and a Sales Deed?

There is a slight distinction between a gift deed and a sales deed.

In a gift deed, the one who is gifting gives away the property without asking for any money. While in the case of a sales deed, one will give away the property in exchange for money.
In the case of a gift deed, one can only give away the property to their relatives. But in the case of a sales deed, one can sell their property to anyone. It is not necessary that the person to whom you are selling must be a relative.

When Can a Gift be Liable for Tax?

During marriages, the gift received from your relatives is not at all taxable. Any form of tax is not paid by either the donor or the receiver for the gifts being exchanged.

A receiver has to pay tax when some kind of work is occurring on the property which was received as a gift. This is stated in the section ‘Income from other sources.’

A gift, in this case, is a sort of irrevocable deal. To make sure that the gift is not changed in the near future, the deal is hence made in front of two witnesses. Along with that both the donor and receiver have to sign on the property itself in the registrar’s office and pay the registration fee and stamp duty value. It is Crucial to know about everything on Plot Registration process Online: https://dolr.gov.in/en/gift-deed

Gift Deed Loans

In case a house is gifted, then there can be no one that you can get a home loan for that gifted house. Because the hose is already being transferred in your name, asking for a home loan for a gift deed is absolutely baseless.

But you can get a loan for a gifted property. In case the property is registered properly and all the documents are verified up to the mark, you are bound to receive a loan for the property that has been received through a gift deed.

What if There is a Home Loan Taken on the Mortgaged Property?

Suppose a home loan was taken on a mortgaged property; in that case, an insurer has to clear the dues by paying to the lender and get his/her property cleared. In case there results in the death of an insurer, then their family members have to pay the dues.

After all the dues are cleared, the insurer must avail the lenders of the online clearance certificate and the property papers. After clearing all the dues, the one who has inherited can now transfer the ownership to their name.

Can the Ownership of a Mortgaged House be Transferred?

Yes, the ownership of a mortgaged house can be transferred if you fulfill the following conditions.

Considering the present owner, the combined income of both the owners must be more than in comparison to the present owner.
There should not be three or more borrowers for one mortgaged house.
If the removed owner is still living on the property, the transfer won’t be applicable.
The property that is mortgaged shall not be a buy-to-let type of property.

Conclusion

Vakilsearch assures you that you have the option of inheriting, selling, or even buying one of them and benefiting from it. Vakilsearch gives you the best reason for how to mortgage a property.

Even you see that most of the mortgaged property is transferable, and it is possible to get them at a lower price. We are hopeful that this article at Vakilsearch would be helpful to know about mortgaged properties.

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