How does the home loan application process?
Meanwhile, millions of urban Indians utilise housing loans to purchase the homes of their aspirations. However, not everyone is acquainted with the home loan process. As a consequence, many loan applications are denied, or borrowers discover themselves in a tricky position because they are still unable to repay their commitments.
A house loan is essentially a quantity of money given to consumers by banks or Housing Finance Companies (HFC) in consideration for an Equated Monthly Instalment (EMI) (EMI). The money issued permits the homebuyer to buy the house, but the asset remains the bank’s security until the loan is fully repaid.
Banks, on the other hand, extensively investigate the borrower and the property before releasing cash. Furthermore, they assess the homebuyer’s loan applications, and even little financial differences might pose issues. As a consequence, the home loan application process is complex and demands crucial understanding.
Loan application procedure for a home
The very first stage in the house loan procedure is to submit an invited application to the bank. Furthermore, the bank requires your details to assess and evaluate your loan eligibility. Usually, banks will demand the following documentation:
- Identity verification
- Address Verification
- Proof of age
- Evidence of education
- Specifics about your job
- Income documentation
- Property information
- Pan Card
Home loan procedure: Payment of loan administrative fees
Your bank will charge you a non-refundable loan processing fee. Banks often impose processing fees ranging from 0.5% to 2% of the loan amount. A Tax on Goods and Services (GST) of 18% will be charged to the total. Banks utilise this amount to initiate and prolong the home loan process.
Several banks have lately begun to waive loan processing fees to attract more consumers. You might try to get an edge by bargaining with your bank. However, not all banks will be prepared to waive processing fees.
Home loan procedure: Loan approval
Assuming all of the following assumptions have been met, the registration process for the home loan begins. The official papers must be prepared on stamp paper with the appropriate values and in a format authorized by the bank’s attorney. Following that, you must mail post-dated cheques for the life of the loan agreement and sign it. The process of redistributing your home loan will begin when you sign the loan agreement. Your bank will disburse the loan funds by the kind of disbursement decided agreed upon (whether lump-sum or in installments).
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
