Friends In today’s article I am going to tell you about the Home Loan Process. If you want to understand this process completely then please read this post.
Every person has a dream that he can take home for his family in his lifetime. But over time, the prices of houses are increasing rapidly, so in such a case, it is impossible for a middle-class person to take home. But home loans will be a good possibility for getting or creating a home.
Home Loan Process Full Guide 2019
Home Loan Process is a bit difficult. But by gathering all the information related to Home Loan, this process can be simplified.
1. Self Assessment
Before applying for a loan, By evaluating the following things should be considered well.
Cost of Property – The price of a Home
Own Contribution – The amount to be borne by themselves. (The bank has a loan of 70-80% of the cost of the house. 20-25% you have to bear).
EMI Affordability – Are you able to pay the installments of the loan? The loan’s EMI ought to ne’er exceed 40-45% of your Monthly financial gain.
Loan Period – The amount of the loan should be as low as possible so that you have to pay interest at a minimum.
2: Choose The Right Lender
Choosing the right bank or Housing Financing Company (HFC) is an integral part of the process of taking a loan Before applying to any bank, compare the home loan schemes provided by different banks:
– Factors to consider while choosing your home loan.
– Interest rate
– Loan Period
– Interest Type
– Processing Fees
– Loan Prepayment Terms
– Quantum of Loan
– The penalty for Late Payment
– Loan agreement
– Loan Approval Process
– Terms and Conditions – Tax Benefits
Home Loan Transfer Process – Conditions for Transferring Loan to Other Banks.
The bank’s interest rates change from time to time. To confirm you’re taking floating or fastened interest rates. Floating rate of interest means as interest rates are going to be enhanced or added by the run, your interest and EMI will also change. Fixed rate of interest has a constant rate of interest throughout the complete loan amount.
Step 3: Preparation of Documents
Generally, the following documents are required for a home loan:
– Documents Required For Home Loan (Check List)
– Identity proof
– Age proof
– Address proof
– Proof of educational qualifications
– Employment details
– Income proof
– Details about the property if finalized
– Bank statements
Step 4: Apply For Home Loan
To complete the process of obtaining a home loan, you can go to the nearest branch of the bank, and you can meet with a bank representative who will help you complete your loan process. To get the loan, fill out the application form and submit it along with all the documents. When you submit a home equity loan Application, you will have to pay the processing fee which can be 0.25% to 1% in different banks.
Step 5: Evaluation and Verification
All the documents submitted by you will be checked by the bank. If needed, the bank may also evoke additional documents from you to be utterly happy. This method might take many days to finish.
After being fully satisfied with the documents, the bank initiates a regional investigation process so that it can be confirmed that all the facts given about residence and office in the application form are valid or not
After this, the bank assesses your loan’s ability to pay. If the bank thought that you are unable to pay the loan and the price of interest on time, the bank will not approve your home loan application. On the opposite hand if the bank finds it o.k. then your home equity loan application is going to be approved.
Alos Read: Types of Bank Loans in India 2019
Step 6: Property Valuation and Verification
The bank will conduct an independent legal inquiry of the property through the lawyer and the lawyer will issue a Certificate or Legal Verification Report to the bank. The bank will then assess the market value of the property by Valuer so that the amount of loan can be ensured.
Step 7: Home Loan Sanction
Once all the inquiries are completed, the bank gives a home loan against the property. An acceptance letter is issued to the borrower and the agreement of the home loan is signed.
Step 8: Loan Disbursement
Once the Home loan agreement is signed, the borrower can decide the date of registration of property with the seller of the property. The recipient might request a Disbursement or Demand Letter by writing to the bank. Then the bank can issue a DD/cheque for registration of the property.
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