Home loans form an integral part of the exciting journey when you decide to buy an apartment. While the home loan application process might appear a little overwhelming, the steps involved in home loan processing are more or less the same among most banks. Here’s a look at the steps involved:
The application form requires basic information about you including your age, address, educational qualifications, employment details, income proof, salary slips, bank statements, etc. You will also need to show proof of income tax returns, whether you are salaried or self-employed.
Loan Processing Fee
Once you submit all the above-mention documents, you have to pay an initial non-refundable processing fee to the bank for the preliminary verification process. The remaining processing fee is charged at the time of loan disbursal and represents a fixed percentage of the loan amount.
Discussions with the Bank
The bank usually sends a representative to the place of work of self-employed applicants or have telephonic discussion with salaried loan applicants for a better understanding of their incomes and related details. This helps in the loan appraisal process.
Valuation of Documents
Once the bank verifies all the documents received along with a personal discussion, bank officials could further visit the applicant’s residence or contact their employer. The bank will also go through the applicant’s CIBIL credit scores to determine their eligibility.
This is the stage when the bank sanctions the loan as per bank policy. Applicant needs to ensure that all necessary documents are provided to the bank to prevent rejection.
Loan Approval Letter
The applicant is sent a legal letter stating loan amount sanctioned, interest rate (fixed/floating) applicable, loan tenure, along with terms and conditions. If these are suitable to the applicant, he needs to sign the document and send a copy to the bank.
Once the loan is approved and accepted, the bank will check the property and ensure there are no title disputes or liens that could lead to conflict later.
The loan is then disbursed – either to the builder or to the applicant. He is also given a repayment EMI schedule to follow. The borrower’s property ownership papers will be kept with the bank till repayment is completed.