If you want to understand how a home loan process works, you have come to the right destination. Getting funds sanctioned for your dream home in India can be a tricky part. They can involve frequent bank visits and submitting countless documents. But this blog will solve your confusion around getting the right home loan, especially for first-time home buyers.
Step 1: Examine your eligibility criteria: Before applying for a home loan everywhere, it is a mature decision to first check your eligibility for the loans you are applying to. This helps niche down the home loan prospects and even give you a clear picture about your financials and repaying abilities.
Step 2: Select the loan which suits your needs: Once you understand your financial situation, you can compare various home loan options where chances of getting approved are higher. You can also compare from a range of home loan options by different providers. Carefully assess the terms and conditions of every option and do not skip the fine print. The trick is to explore every home loan product available and then take the call. Pay careful attention to interest rates, loan tenure and any hidden charges that might contribute to the overall borrowing cost.
Step 3: Submit your loan application to the bank/lender: After selecting the loan amount and desired tenure, you can submit the loan application which will include your personal and financial details as well as the property details. This is a crucial step so make sure you submit correct details.
Step 4: Submit the documents required for the Home Loan: It is very crucial to submit original and legitimate documents because the bank/lender will conduct through checks to assess the credibility and validity of those documents. The list of documents required for a Home Loan are as follows:
1. PAN CARD
2. AADHAR CARD
3. ELECTRIC BILL(IF APPLICANT IS ON RENT THEN RENT AGREEMENT AS WELL AS PERMANENT RESIDENCE PROOF)
4. 1 YEAR BANK STATEMENT
5. LEGAL TECHNICAL CHEQUE
IF SALARIED
1. 3 MONTHS SALARY SLIP
2. 3 YEARS FORM16
IF SELF EMPLOYED
1. 3 YEARS ITR
2. GST CERTIFICATE
3. 1 YEAR GST RETURN
IF PURCHASING PROPERTY FROM SOMEONE OTHER THAN BUILDER
1. FULL CHAIN SALE AGREEMENT
2. OC
3. CC
4. SHARE CERTIFICATE
5. MAINTENANCE COPY
6. APPROVE PLAN
7. INDEX 2
Step 5: Home Loan Sanctioned / Approved:
This means the bank has reviewed your documents, verified your eligibility, and officially agreed to lend you the requested amount. You’ll receive a sanction letter mentioning loan amount, tenure, interest rate, and terms & conditions.
Step 6: Signing Agreements, Paying Charges & Mortgage Registration:
Once your loan is sanctioned, you must sign all legal agreements and loan-related documents with the bank. At this stage, you also pay applicable charges which include stamp duty, registration charges, and mortgage creation fees to both the bank and the government. After these formalities are completed and the property is legally mortgaged, the bank proceeds with disbursing the loan amount to the seller or builder’s account.
Step 7: Home Loan Disbursed:
After signing all agreements, paying required charges, and completing property mortgage formalities, the bank disburses the loan amount either in full or in stages, to the seller or builder, depending on the property type. If you buy an under-construction property then disbursement will be done according to the % of building construction completed. Also the disbursement will be initiated only when construction is on plinth level.
Step 8: Loan servicing: After the loan amount is disbursed it is important to have a healthy relationship between the borrower and lender. EMIs must be paid on time and after the loan is repaid, proper foreclosure of the loan should be done. The borrower should collect a No Objection Certificate or No Dues Certificate that will prove that the loan has been repaid. They should also collect a Home loan balance statement which shows zero balance due.
Applying for a home loan might not be the most straightforward task. There might be many other steps involved depending on the person’s needs. To make this process swifter and convenient you can take the help of Swift Consultancy. We are ready to get your home loan approved and make the process extremely convenient for you!