Buying a new house requires a large investment and most people have to seek financing and loan to meet the requirement. So, the next step after zeroing the property is to research for home loan options to get the best deal. To bet the home loan approver the buyer must meet the lender’s eligibility criteria and produce the required documents. If you also have been exploring financing options to buy a new house, here’s your step-by-step guide to applying for a home loan
First up fill out the application for the home loan with the required information and documents. While applying for a home loan, a borrower is required to provide their personal information (name, address, phone number, ID proof etc.), income details, documents verifying their educational qualification, employment, and estimated cost of the property for which the loan is applied, present means of financing and other information about the property.
Once the application is processing is completed, the applicant is required to pay the processing fees, the amount collected for maintaining the applicant’s loan account. The processing fees usually vary between 0.25 to 0.50 per cent across all major banks.
The next step is the verification of the documents submitted by the applicant. This includes verification of the address, employment and other details.
After due verification, if the bank deems the application the loan amount is sanctioned as per the eligibility of the application. The bank thoroughly verified the background of the applicant including their transactions with the bank, income, employment and ability to repay the loan, before sanctioning the amount. The bank, however, can also choose to deny the loan.
After sanctioning the loan, the bank sends an offer letter to the applicant, indicating the bank’s approval with details about the loan amount, interest, loan tenure, and other terms and conditions
The bank carries out other checks about the property before the final disbursal of the loan
Final Loan Deal
Once the other check about the property is completed by the bank after clearing all legal aspects, the bank finalizes the loan documents, drafts them, and has them stamped.
After the paperwork, the applicant has to sign the agreement for the home loan and submit post-dated cheques for the initial 36 months or the duration both the parties have agreed upon. Following this, the original property documents have to be handed to the bank.
Once the applicant signs the papers and everything is legally clear, the loan amount is given via cheque. In case, the applicant is trying to source some more funds from outside, then the pieces of evidence have to be submitted before the loan’s part-disbursement can be processed. The cheque is issued under either the seller or developer of the property.
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