Applying for a Home Loan? Know these Important Stages
Jun 12, 2018 Home Loan
Home loan is an important aspect of the home buying process. In today’s time, it has become a necessity to fulfil the dream of owning a home. The home loan helps in organising the much needed finance for your home and also provide the tax benefit. And the best part is nowadays banks finance up to 85 to 90 percent of the property value.
But there are certain measures and procedures that you need to follow.
But there are certain measures and procedures that you need to follow.
Application process
The first step is going through the process of home loan application successfully. Before buying the property, it is very important to plan your budget, as it will further determine the amount of loan that is actually required and accordingly you can apply for the loan. While working on the budget you need to consider the future expenses, your EMI amount that you need to pay every month to repay the home loan as well as the other regular expenses. Although the amount that you might have calculated might differ with the actual amount charged by the bank but that initial calculation might help you to understand whether you are in a position to invest in a property at this moment or not. As per the basic rules, the total amount of EMI should not be more than the 50 to 60 percent of your total income. Once you are through with your budgeting, you can then get in touch with the banks with your application. Along with the application form, you need to submit supporting documents, so that the banks can evaluate your eligibility for the loan.
Evaluation
After receiving the application, the bank will evaluate the submitted documents to check your eligibility for the loan. As a part of the evaluation process, the bank will assess your income, liabilities, nature of your job, number of dependents, your ability to repay the loan along with the other details. The bank also assigns someone to visit the property and recheck the details that you have given in the application form.
Getting approval
After evaluating the documents and the property you want to buy, the bank offers conditional sanction of your loan. The bank informs about the acceptance of your application by issuing a formal letter along with the terms and conditions that you need to accept to get the loan sanctioned. Read the documents carefully, signed them and submit the documents back to the bank. You also need to provide approval for ECS for auto-debiting of the EMI directly from your bank account along with submitting post-dated cheques as per the terms and conditions.
Pay-out
Once your application in sanctioned, the banks disburse the loan amount to the seller of the property. As per the disbursement process, the seller of the property needs to coordinate with you for property registration. Similarly, the bank provides Banker’s cheque to initiate the disbursement process and register the property.
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