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Home Loan Process in India

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Qualifying for a house loan is a thrilling initial step toward purchasing your dream home. This does not have to be difficult with our step-by-step guide to the house loan process. Although there may be slight variances between lenders, the fundamental approach outlined below will be followed by all institutions. Following the procedures outlined below will guarantee that your home loan applications go smoothly and without hiccups.

Home Loan Process in India

Application 

The process of obtaining a home loan starts with the submission of an application format. A few pieces of basic details regarding the individual will be required for this loan application. After completing the official application, the following step is to submit all of the valid papers necessary by the bank.

Documentation

After completing the home loan request form, submit documentation and deliver it to your bank. 

Home loan documentation often comprises the following, which must all be self-attested:

  • Identification Documentation (such as PAN Card, Aadhaar Card, Passport, Driving License, etc.)
  • Address Proof (such as Aadhaar Card, Passport, Driving License, Utility Bills, etc.)
  • Age Verification (such as Birth Certificate, 10thCertificate, Aadhaar Card, PAN Card, Passport, etc.)
  • Evidence of Academic Credentials
  • Income Documentation (such as Bank Statements, Income Tax Return, etc.)
  • Company Proof (such as Balance Sheet, Profit & Loss Statements, Business License, Proof of Business Address, etc.)
  • Property documents (such as an authorized copy of the building plan, NOC from society/builder, the projected cost of house construction, and so on).

Though banks may ask you to submit additional documents related to the loan apart from these.

Processing Fee

The bank may request a processing charge once you complete the home loan application form and submit all accompanying documentation. The processing charge for a home loan is non-refundable and varies per lender. It typically varies between 0.25 percent and 1.0 percent of the loan amount sought. 

In addition, many banks do not impose processing costs. Banks charge a service fee to start the home loan process and keep the individual’s loan account active. Every year, it includes payments for sending some private papers, such as IT credentials, post-dated checks, and so on.

Meeting with the Bank

After submitting the form and accompanying papers, the applicant must wait for further notification from the bank. Throughout this time, the bank will review your information and decide the number you are qualified for based on your ability to repay. 

Even before the loan is approved, your bank will request that you come in for a face-to-face meeting. Direct communication is required to acquire further information and analyze your financial potential.

Verification of Application & Documents

Following private discussion, the bank will verify the given papers and other facts. Bank employees may even examine the property or contact the company to check the facts you provided in your housing loan.

Sanction Letter

Following successful execution of the preceding stages, you will receive a home loan sanctioning letter, that will typically contain information such as the sanctioned amount, type and rate of interest, loan length, method of repayment, programs (if any), policies, and so on.

Upon receiving the letter, sign and return the accepted copy to the lender, assuming the letter’s contents are acceptable to you.

Verification of the Property

The bank will evaluate the asset pledged prior to allocating the loan. Original documents of the property title, NOCs, encumbrance certificate, and any additional papers requested by your bank will be needed. A regulatory audit will be performed on the property to ensure that the ownership is sound and that no disputes exist. The bank will also do a professional valuation.

After completing the above-mentioned stages successfully, you will receive the final agreement from the bank. Ultimately, the house loan finance will be issued in accordance with the agreed terms and conditions.

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