Decided on your dream home and now have to raise the funds?
Fortunately bank loans are not as difficult to get as they used to be. It’s
still a slightly long process, but then it’s always better to know that
everything has been checked thoroughly rather than keep having to run around
every three or four months. Here are the steps to go through:
1. Application
You need to fill up an application form which will ask for
your basic information such as address, employment details, income, education
and so on. The form will also ask for the property details like estimated costs
etc. They will also ask you to submit verified photocopies of certain documents
such as
Income proof
Age proof
Identity proof
Address proof
Employment details
Proof of educational qualifications
Details about the property if finalized
Bank statements
These are for security-both yours and the bank’s.
2. Processing fees for home loans in India
An important thing to note about home loans is the processing
fee. Banks charge a processing fee for every home loan application. This fee is
nonrefundable. The processing fee varies from bank to bank and is generally
between 0.25% to 0.50% of the loan amount. This fees is used by the bank to
start and maintain the home loan process including completing the various
formalities during the entire period.
3. Evaluation and Verification
Once all your paperwork is in, it takes a few days for the
bank back after going through your application and deciding your eligibility.
If you pass this stage, field verification begins for which they send
representatives to talk your family and neighbours as well as your colleagues
to verify that the information you have provided is correct. The references
provided in the application are cross checked and verified.
4. Repayment Verification
The bank now verifies your repayment capacity. After
reviewing your credit records and bank account details, if convinced that you
will be able to make payments every month, the bank sanctions your home loans. The sanction
can be conditional or unconditional. If the sanction is conditional, you’ll
have to fulfill the conditions imposed before the loan is disbursed. If they
feel that you will not be able to pay back the loan, they will not sanction
your loan.
5. Offer letter for home loan
The bank then prepares an offer letter which contains the
following detail:
The amount of home loan sanctioned
The interest rate applicable on your home loan
Whether the interest rate is fixed or floating
Your home loan tenure
The mode of repayment of the home loan
If any special scheme applies to the home loan, its details
The terms and conditions associated with the home loan
If you find the offer attractive and agree with all the facts
mentioned in the offer letter, you will have to provide an acceptance copy to
the bank. This is generally a duplicate of the offer letter signed by you,
provided to the bank for its records. If the bank charges any Administrative
fee, it will have to be submitted at this stage.
6. Property Verification
The bank sends representatives to verify the property you are
looking to buy. For this, you have to submit the original property documents.
These include the title deeds, no-objection certificates and other documents.
The bank conducts a legal check so as to verify that the property has a clear
title and the home loan is being disbursed to the right person and for the
right reasons. Banks don’t lend for disputed properties and for titles where
ownership cannot be easily enforced.
[Source: http://www.midtownstructures.com/blog/getting-home-loan-india]