Home Loan Procedure At A Glance

At present maximum people are keen on availing housing loans to achieve their dreams of owning a house. However, willing borrowers must have a deep insight regarding the entire lending procedure before they avail a home loan.

Home loan procedure at a glance

To avoid the chance of loan rejection, borrowers must meet lender specific eligibility criteria and know the loan application process. Follow the steps:

Step 1: Fill up the home loan application form: Home loan procedure commences with filling the application form. The loan application requires basic details like personal details of the applicant, residential address, employment details, income status, property details etc.

Step 2: Payment of loan processing fee: After applying for the loan amount, applicants have to pay the initial processing charge to the lending institution. Borrowers must choose a lending institution that charges minimum additional charges. Less processing fees, along with home loan tax benefits will help a borrower save a lot of money.

Step 3: Applicants’ scrutiny and document verification: The lending institution will scrutinise the applicants’ credentials; evaluate financial and personal details before deciding the maximum credit to be offered to the borrower.

Step 4: Approval process: It is a crucial step where lenders may sanction or reject the home loan request by checking the parameters like LTV, age, repayment capacity etc. 

Step 5: Home loan sanction letter: The lending institution will send a certified offer letter once the loan is sanctioned. The letter will contain details like sanctioned amount, interest rate and type, repayment tenor details, mode of loan repayments with other terms, conditions associated with the loan amount. Borrowers need to sign it and send a copy of that.

Step 6: Property verification: Before disbursing the amount, the lending institution will evaluate the property in question to ensure that the property is not under any legal conflict. Lenders will check the valuation of property, location, age, maintenance level of the building, etc.

Must Read: 5 crucial factors that affect your home loan interest rate and steps to reduce it

Step 7: Disbursal of loan amount: Once all the verifications and signing of loan agreement are done, the amount is disbursed.

Furthermore, borrowers must compare several lenders and keep updates about the current home loan interest rate to opt for an affordable one.

Furthermore, they should check whether the lending institution offers a home loan balance transfer facility.

To conclude, a housing loan is one of the popular borrowing options amongst home buyers. Therefore it is essential on borrowers’ part to know every intricacy of the lending process before they avail a home loan.