Buying a home is a big personal and financial milestone for most of us. Years of saving are required to accumulate such a large sum. However, with growing home prices, a few years’ worth of money is insufficient. At best, you can put that money toward a down payment on a house. You can easily get a home loan from a bank, lender, financing institution or NBFCs. These lenders make it simple for you to buy the best home loan. However, the overall process of obtaining a home loan can be lengthy, which is why you should be aware of and prepared for it before applying for one.

Therefore, here is the complete home loan procedure you should be known of – 

Fill the home loan application form with required documents

The application form is the initial document of the home loan process in which you must fill in your personal information such as your name, address, phone number, occupation, monthly and annual income, and educational information, among other things. The borrower should also provide information about the home he wants, as well as an estimate of the property’s cost and an affordable deposit. You should attach the documentation such as ID, proof of income, address proof, income certificates, bank statements, ITRs for the previous three years, and other documents in the application form.

Paying of the Processing Fee

The applicant will have to pay the processing fee to the bank after finalizing the application filling and document submission process. This is the money collected to keep the applicant’s loan account in good standing. Every year, it requires sending some confidential papers (such as IT credentials, post-dated checks, and so on).

Interaction with the Lender

You should wait for the next update from the lender’s side after submitting the form and paying the processing fees. During this period, the lender will go through your information and determine your eligibility for the home loan based on your repayment capacity or CIBIL. Before the loan can be approved, your lender will need you to come in for a face-to-face meeting.

Verification of Documents

The bank will begin calculating your eligibility once the personal discussion is completed. This may entail a bank employee visiting his current address and/or contacting his employment. Your credit score will also be checked with the help of any credit bureau such as CIBIL.

Approval Process

This is the procedure that will determine whether the bank will approve your loan application (as per Bank Credit Policy). You should review your documentation to confirm whether they are complete or not. 

Loan Sanction Letter

If your loan is authorized, the bank will issue a loan sanction letter. The eligible loan amount, interest rate and rate type (fixed or variable), loan repayment tenure, and all the terms and conditions of the agreement will all be included in this letter.

Property inspection

It is the most important stage as well as one of the final stages. The bank will check the property in question before disbursing the loan. Original copies of the title deed, no objection certificate, and any other papers requested by the bank will be required.

The property will go through a legal check to avoid any disputes or controversy in the future. The bank will also do a technical value of your property. If the property is in under-construction property, the bank will analyze the project’s location, stage, quality, and progress, and other factors.

Home loan amount disbursal and Signing of Home loan agreement

The registration process for the house loan begins once all of the following formalities have been duly completed. The legal documents must be printed on stamp papers with the requisite denominations in a manner approved by the bank’s lawyer. Following that, you must produce post-dated checks for the agreed-upon time and sign the house loan agreement.

The Bottom Line

Now that you have known the complete process of home loan application, you are ready for a hassle free home loan experience. Make sure to enquire about the home loan interest rates from all the famous lenders and banks to be able to crack the most cost effective deal.

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