With the advancement of technology and the internet, availing of a home loan has become a much smoother process now. Individuals no longer need to stand in long queues for hours or spend time talking to representatives to know their home loan status. The home loan process is now shifted online, and the process is simple and hassle-free.
Interested individuals keen to learn about the entire home loan documentation and process can read along.
The complete home loan process
These are the steps that one needs to follow to complete their home loan process.
1: Filling in the application form
The first step involved in this housing loan process is filling in the application form. These application forms are available online as well as offline. In order to fill it in online, individuals can visit the website of lending institutions. To fill it offline, individuals need to visit their lending institution’s office personally.
Applicants need to fill in this application form by providing basic details like name, address, education, income, employment type, existing liabilities, etc.
2: Submitting the form and other supporting documents
After individuals have filled out their application form, they need to submit it along with other necessary documents. Other documents which are required to be submitted are:
- Proof of age such as birth certificate, 10th standard certificate, Aadhaar card, etc.
- Proof of identity such as Aadhaar card, PAN card, voter card, driving license
- Address proof such as passport, driving license, Aadhaar card, or any utility bills (electricity bill, gas bill, water bill)
- Income proof such as income tax return, salary slips, bank statements, etc
- Educational qualification proofs
- Proof of business in case of self-employed individuals
- Documents of the property that is to be mortgaged
3: Payment of home loan processing fees
After individuals submit the application form along with the required documents, their lending institution might ask them to submit a processing fee. It is a non-refundable fee that varies across different lenders. Usually, this fee ranges from 0.25% to 1% of the desired loan amount. There are also some lenders that do not charge any processing fee from their customers.
Apart from application fees, individuals should know other fees and charges associated with a home loan. Thus, it is always advisable that individuals compare different lenders and choose the one offering housing loan at the most affordable rates.
4: Discussion with lender
The fourth step in home loan procedure is completing all necessary formalities with one’s chosen lender. After submitting documents and other necessary things, the applicants have to wait for a few days. These lending institutions take this time to evaluate the home loan amount an individual can get according to their repayment history and income. The lending institution might also ask the borrower for a face-to-face visit for verification and loan-related discussion.
5: Documents verification and processing
After the lender has a personal interaction with the borrower, they will start with the verification process of the documents submitted. First, they will check whether all the submitted documents are genuine and then proceed with the disbursal process.
After completing all the steps mentioned above, individuals will receive a home loan sanction letter if their loan gets approved. The following details are included in the sanction letter:
- Sanctioned loan amount
- Loan tenor
- Applicable rate of interest
- Policies of the home loan
- Mode of repayment
- Type of interest-fixed or floating
- Terms and conditions of the home loan
6: Verification of property and legal check
The lending institution will send representatives to verify the property and check if the property is clear and free from any dispute. Besides, individuals have to submit an encumbrance certificate, no objection certificate, and original deed copies. The representatives will also carry a technical check to evaluate the property.
In case of under-construction property, their representatives will see the stage and progress of construction, location of the property, etc. Then, after checking all the parameters, they will finally disburse the loan as per agreed terms.
Apart from knowing the home loan process and documents related to it, individuals should also know the factors which can affect their home loan eligibility. Proper knowledge on the process, documents and eligibility would make the home loan process easy.
Several financial institutions offer pre-approved offers to their customers on various secured and unsecured products to draw more customers. These make the lending process smooth and hassle-free. To check their pre-approved offers, borrowers can quickly enter their names and contact numbers on the websites of lending institutions.
This is the entire home loan process summed up. Eligible individuals can follow these steps and take the first step towards their dream of building a home.