A Quick Guide On How To Easily Complete The Home Loan Application Process
An application for a house loan is the first step in the procedure. Your name, address, phone number, occupation, monthly and yearly income, and educational background are all requested on the home loan application form. This is the most basic piece of paper you’ll ever fill out. It is also necessary for the borrower to provide specifics about the property he is interested in purchasing, an estimation of its value, and an amount that is both manageable and reasonable. They must provide their id proof, address proof, income proof (certificates), ITR of the previous three years (if applicable), bank statements and other documents combined in the form.
- Inquiry on the validity of documents
The bank validates your paperwork once you’ve submitted them. Banks may take up to two days to check your paperwork, which is a critical part of the home loan process. You may even be requested to go to the bank and appear in person for an interview at this stage. In order for the bank to be sure that you can return your loan on time, this is how they do it.
- Performing a background investigation:
For their part, banks verify the authenticity of your paperwork and do a background check on you. As a result, the bank may carry out an inquiry based on the information that you have provided, such as your former and present residences and your employer’s credentials.
- Obtaining a copy of your credit report
Since the RBI mandated that credit bureaus must furnish their consumers with a free credit report yearly, this procedure has become easier. A credit score of 750 or above indicates a person’s reliability in repaying prior debts.
- Fee for Paying:
In order to complete your loan, your bank will charge you a non-refundable fee. In most cases, banks levy a processing fee between 0.5% and 1% of the loan amount. This sum is used by banks to initiate and sustain the home loan process. Some banks have recently started to waive loan processing fees in an effort to attract new customers. To take advantage of this perk, you must work with your bank to do so. But not every bank is going to be averse to the costs associated with transaction processing.
- An assessment of one’s ability to repay debts:
The most important component of the house loan procedure is the verification of the borrower’s ability to repay the loan. According to the satisfaction of the bank, and your capacity to repay the principal (plus interest) on time, your home loan request may be approved or rejected by the bank. In the event that the bank gives a conditional loan approval, all of the requirements must be met before the loan may be issued.
- Preparation of real estate documents:
Following receipt of a sanction letter from the lending institution sanctioning your loan, you must provide the first set of property papers, which stay in the bank’s possession until the loan is fully repaid. It’s common for the original property paperwork to include the chain of ownership acquisition and transfer of ownership in sequence until your Sale Agreement execution, relevant NOCs from connected authorities, the seller’s name, ID and address proof, and more. Before authorizing a loan, the bank checks all relevant property paperwork. To ensure a smooth loan process, the bank dispatches a representative to personally inspect each property, once before approval and again after it has been sanctioned.
- Disbursement of Loans:
This is the final stage of the entire mortgage process: the disbursement of the loan. This involves the signing of the loan agreement and the distribution of the loan as stipulated in the Sale Agreement, including the down payment by the lender.