Although in the bygone days home loan procedure was a complex task. However, these days with the advent of data science and technology, loan processing has been straightened out. So, when you wish to apply for a home loan, you can visit the bank’s official website.
There are various steps involved in the procedure to get a home loan. To ease the complication of home processing we have meticulously arranged the following steps of a home loan for you. The forthcoming steps will further clarify your queries and will ensure a hassle-free home loan application.
Let’s have an overview of the steps involved in the home loan application.
- Fill out the application form and attach the required documents.
- Fee payment
- Documents authentication and processing
- Sanction/Approval letter
- Processing the offer of acceptance
- Legal and technical check of property papers
- Loan disbursal
Fill out the application form and attach the required documents:
The first and foremost step of the home loan procedure is to fill out the form for a home loan application. This requires some basic information regarding your status and background. The following are the usual requirements that the lender demands.
- Personal information like your name, pin code, phone number, etc.
- Property details are kept as a security
- Monthly or annual earnings of the applicant
- Educational background of the applicant
- Residential details of the applicant
Collecting the documents:
Once the application form is filled out, the next is to collect all the financial valid documents which act as proof. Generally, the documents included are:
- ID proof(Aadhaar card, passport, pan card, etc.)
- Bank statement
- Address proof
- Employment details(ID card, Salary slip)
- Educational proof(School/Diploma/Degree)
- Age proof(Birth certificate)
Fee Payment
After submitting the required documents, you have to pay a certain amount to the bank for further processing. These are the maintenance charges that the bank needs. This amount is used to maintain the applicant’s bank account. Plus, this involves some confidential papers annually such as (Post-dated checks and IT Certificates). Though the maintenance fees vary according to the banks. However, the usual processing fees range from 0.25% to 0.50 % of the requested loan amount. Let’s say, a borrower requires a home loan for 20 lakhs, the processing fees will be 5,000 (at 0.25%) and 10,000(at 0.50%). Sometimes, lenders may ask you to pay the fees earlier.
Documents authentication and processing
At this step, the financial organisation validates the paper and documents for loan disbursement. They verify the attested paper for further processing of the loan. There might be some changes where the bank will inquire with your firm or workplace to confirm your occupation or employment. The lender may contact you to pay a visit for live interaction and to collect additional information before sanctioning the loan. This procedure also involves the conducting of your credit score by CIBIL (Central Information Bureau Limited). After checking your creditworthiness, the loan application will move to the next step, considering all the documents as satisfactory as per the bank.
Also Read: Who Can Apply for Direct Deposit Loans and Receive Funds?
Sanction/Approval letter
Subsequently, you will be receiving a sanction letter after the successful completion of the aforementioned steps. Things that are included in the approval letter or sanction letter are listed below:
- Type of interest rate (fixed or floating).
- Loan repayment term.
- Home loan amount
- Mode of loan repayment.
- EMI payment details.
- Validity of the loan sanction letter.
- Special scheme (if applicable).
- Tax advantages.
The bank goes with certain criteria to double-check the details of the applicant. So, as to prevent any scam or fraud. Things that are taken into consideration before sanctioning the loan are repayment history, personal identification details, employment background, source of income, and nature of business. These details further finalise that you are capable of repaying the loan.
Processing the offer of acceptance
This is a step where the applicant will get a confirmation for the loan disbursement. The bank sends an offer letter when your loan gets approved/sanctioned.
Once you agree with the terms and policy, mentioned in the offer letter, you will have to sign a duplicate copy of the offer letter. You can even try to negotiate with the bank and can get a lucrative sum. There is no harm in trying.
Legal and technical check of property paper
Once you accept the offer letter, then the bank sends their official to your property site for the inspection. You have to submit original papers of your property to the bank. Remember this will act as a security for your loan application.
General details included in the property papers are:
- Power of Attorney
- Mutation Register paper
- Copy of Building map
- Allotment Letter
- No- objective certificates(NOC)
Loan disbursal
Finally, your home loan will be disbursed after the evaluation of your documents and your site estimation.
Here is your answer to the how to procedure for home loan. So, if you ever apply for a home loan, follow the above-mentioned steps. But do make sure to conduct thorough research of your own.
