Getting a Home Loan In India

Getting a Home Loan In India

Getting a Home Loan In India

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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. Its still a slightly long process, but then its 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:


ApplicationYou 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 asIncome proofAge proofIdentity proofAddress proofEmployment detailsProof of educational qualificationsDetails about the property if finalizedBank statementsThese are for security-both yours and the banks.


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 fees is non refundable. The processing fees 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.


Evaluation and VerificationOnce 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, a 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 verifiedhttp://midtownstructures.com

Repayment VerificationThe 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 loans. The sanction can be conditional or unconditional. If the sanction is conditional, youll 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.


Offer letter for home loanThe bank then prepares an offer letter which contains the following detail:The amount of home loan sanctionedThe interest rate applicable on your home loanWhether the interest rate is fixed or floatingYour home loan tenureThe mode of repayment of the home loanIf any special scheme applies to the home loan, its detailsThe terms and conditions associated with the home loanIf 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.


Property VerificationThe 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 dont lend for disputed properties and for titles where ownership cannot be easily enforced.Along with the legal check, banks also sends experts to the location of your property to conduct a technical valuation. If the property is under construction, the banks verify the stage of construction, quality of construction, progress of construction, locality etc. and evaluate the property on established parameters. In case where the property is ready or is being resold the bank verifies the ownership, maintenance, age of property, quality of construction, locality and required legal clearances. The banks have qualified valuators, which assess the value of property on various parameters and decide on the amount of loanThe sole purpose of all this is to ensure that the property has a clear title, is technically sound and meets the valuation standards of the bank.


Releasing the money. Once the formalities are completed and the bank is satisfied with the legal, technical and financial valuation of the property, the registration process for the home loan begins. The legal documents are to be prepared on stamp papers of required denominations in a format approved by the banks lawyer. The home loan agreement is then signed and you need to submit the post dated cheques for the agreed term. After the home loan agreement the loan disbursal process begins. Depending on the home loan purpose, and the agreed type of disbursal (lump sum or in stages), banks disburse the home loan amount


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Getting a Home Loan In India