All of us dream of a home sweet home. It is a personal asset that you have dreamt of keeping it. To buy a home, there are two main things that you need to think of is a pretty home and not-so-pretty and unavoidable home loan. But you need to qualify yourself for a home loan. A lender needs to evaluate your repayment capacity that is essentially measured based on your income, expenses, work profile, savings, financial capacity, other dues, and repayment loan history. If you have a bad credit score, it would impose a problem while you qualify for a home loan. Here are the steps that guide you to avail of a home loan that goes from the start of the application form to the amount dispersal.
- The Application Form – The application process starts to fill a form where you reveal important personal and professional information. It includes your assets and liabilities, property details, and its estimated costs. The application form would vary from vendor to vendor, but it is the same almost.
- Documentation – Together with the application form, you need to provide a few documents. They are:
- Identity proof
- Age proof
- Address proof
- Certificates related to your educational qualification
- Employment details
- Salary slips
- Bank statements
- Property details
- Processing Fee – The lender charge’s a processing fee for your loan application form process. Mostly, this fee would range from 0.25% to 1% of the total loan amount.
- Evaluation – Once you submit the application form, the bank would take one or two days to evaluate it and later call for a personal discussion. So, carry all the original documents for which you have submitted together with the application. The lender would verify the information that you mentioned in the application form.’
- Bank Investigation – The bank needs to authenticate the information that you have provided by visiting your residence and your workplace. You will be intimated about their visit and you should make yourself present at that time.
- Loan Sanction –Once the bank is pleased with the required information that you have submitted and their verification process, the loan with be approved or rejected basis your creditworthiness. The credit appraisal process would consider your age, qualification, income, and CIBIL report that would check your credit repayment track record. On checking with this property, the bank would finalize the maximum loan amount it can provide. This is informed to you by a sanction letter. The letter contains the following details:
- The loan amount and it is a period
- The interest rate of the loan
- The repayment mode
- Terms and conditions
While you agree upon the terms and conditions, you will sign the receiving copy that the bank would record it.
Assessment and Property Valuation
Once the bank judges the creditworthiness, it would turn its attention to the property that you are to purchase. Once you have decided on the property, the bank would request you to submit the original property documents. Bank would keep these documents till you repay your loan. The property documents are as follows:
- No objection certifications are given from the legal owners like the housing society
- Development authority’s approval to construct the property original sale deeds
These documents are carefully checked by the bank’s legal counsel to check their authenticity.
- Registration Process –While the above steps are completed, the property registration is carried out. The process to sign and stamp of the loan agreement take place at this step. Here, you would also be required to give post-dated cheques to your bank.
- Loan Amount Disbursement – Once the loan amount has been signed, the bank would make the loan amount disbursal that would be about 85% to 90% of the total property value. The remaining you will be required to pay as the down payment.
Having received the loan amount, you need to be aware of the amount that you need to pay as EMI. Home Loan EMI Calculator helps you find out and keep track of your Home Loan amount. A Home Loan EMI Calculator would help you to find the EMIs amount that you require to pay for your Home Loan. This would help you to make an informed decision.
Taking into consideration the above steps, would help you to prepare for your home loan and improve your chance to get a faster home loan.