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A Borrower’s Guide To Home Loans


Of late, the real-estate market has exploded with opportunities for people to buy themselves a home. For most people, taking up a House Loan is the most convenient way to realise their dream of owning a home.

The process involved to get a loan sanctioned can be quite daunting, but not if you know what to expect.

Here’re some of elements you will encounter when applying for your House Loan:

The first step to getting any loan is applying for it. If you like a personal element to everything you do, you can head down to a bank or NBFC and fill out the application for a loan in person. If you want to save your time, and energy, you can simply go to the lender’s website and download the application form for the loan you want—in this case, a Home Loan.

Along with your application, you’ll also need to submit a few other documents required for Home Loan. These documents include ID proof, address proof, age proof, income and bank statements, educational certificates, and proof of employment.

In order to know whether your application stands a chance of being approved or not, check the loan eligibility criteria of the bank or NBFC. If you meet all their requirements, then you can be rest assured that your application would be met with a loan sanction.

Some banks and financial institutions charge a nominal, non-refundable processing fee. Usually, this would be a minute percentage of the principal amount you’ve applied for, and has to be paid irrespective of whether your application gets approved or not. However, most banks and NBFCs have stopped charging processing fees, which means you can apply for a loan without the fear of losing any money if your loan gets rejected.

After your application has been submitted and your processing fee has been paid, your financier will scrutinise your application and your finances carefully.

This step usually involves the borrower visiting the office of the financier, where your application will be reviewed in your presence. Here, they will evaluate whether your finances and your employment status allow for the added expense of a loan EMI to your budget.

This meeting usually takes place two to three days after the application has been submitted. You will most probably be asked to submit your original documents at this stage for the purpose of verification.

Once all the verified documents, along with your interview, has convinced the institution of your capability to repay the loan, you will be issued an offer letter.

The details drafted in the letter would include:

  1. Amount to be sanctioned
  2. Rate of interest that comes with it
  3. Type of interest—floating or fixed
  4. Tenure of the loan
  5. Mode of repayment
  6. Whether it is disbursed under a scheme or offer
  7. Terms and conditions of the loan

If you are content with the details offered, you have to sign the acceptance letter and return it to your lender within a limited amount of time, which varies from lender to lender. The copy you sign serves as a duplicate offer letter, which the bank or NBFC keeps for its record.

At this stage, you’ll need to pay administrative charges for the loan (if any).

This is the part where the bank makes sure they are backing a winning horse. Representatives of the financier will make their way to inspect the property you intend on buying. During this evaluation, the details collected will give the lender a good idea of the value of the property. For properties that are still being constructed, the valuation will consider aspects like location, how far along construction is, and what is the quality of the build.

Once the valuation of the property is done, you’ll be asked to submit the legal documents of the property. This paperwork will be checked for its authenticity and will be retained by the financier until the entire loan amount has been repaid. You have to make sure that the original title deed and NOC are present amongst the documents that you submit.

After all the formalities mentioned above (including the registration) have been completed, the loan amount will be disbursed according to the terms mentioned in the offer letter. This disbursal can either be carried out in stages or in full. When dealing with a property that is ready to move into, the amount to be sanctioned is usually given out in full.

Some banks and NBFCs may have a few changes in their process for a Home Loan, but most institutions follow the same blueprint.

Once all the details of the loan have been seen to, it has been disbursed, and has been availed, there is only one thing left to do—repay it. With the help of an online Home Loan EMI calculator, the amount you pay per month can be easily calculated, even before you apply for the loan. Once you have a comfortable tenure and a proper financial plan in place, you will be able to apply for, get, and repay your Home Loan with ease.

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