Becoming a homeowner is a significant personal and financial milestone for almost everyone. But with the ever-increasing property rates, most people can afford to become homeowners by taking on a home loan. While it is easy to find a lender, one must remember that the process of a home loan – from application to disbursement is a long one and is packed with many formalities on both, the lender and the borrower’s part. Here is a detailed guide of the entire home loan disbursement process.
Fill the loan application form: You can either download the loan application form or collect it from your preferred lender whether it is a bank, HFC or NBFC’s office. An application form is a simple form in which you need to fill your basic details; your name, contact details, address for correspondence, details of education, employment, and monthly and annual income. You also have to provide details of the property you intend to purchase, its estimated cost, the down payment you can pay, etc.
Submit the documents mentioned in the application form: The next step in the loan disbursement process includes the submission of documents mentioned in the form. You must provide your PAN Card, ID and age proof documents and residence proof documents from the accepted documents listed in the form. You also need to provide your employment details, education proof documents, bank statements, proof of IT returns filed, income proof and documents related to the property you wish to purchase such as No Objection Certificates, proof of completion of construction (in phases) etc.
Pay the loan processing fees: The loan processing fees is a non-refundable amount charged by the lender and the fee is collected towards the maintenance of your loan account, background verification, checking your credit worthiness, etc. You would typically be charged a loan processing fee of 0.25% to 1%.
Verification and evaluation: Perhaps the most crucial of the home loan disbursement stages is the verification of the applicant and the documents provided by him. The lender also evaluates the borrower’s repayment capacity and decides whether to sanction or reject the loan. You may be called for a personal interview or the lender may visit your home/office to validate the information provided in the application form.
Loan approval letter: Once your loan is approved, the lender will send you a letter explaining the maximum loan amount you are eligible for, the interest rate payable by you, the tenure of the loan and other related terms and conditions. If you find the terms of the loan acceptable you can sign the sanction letter to begin the loan disbursal process.
Property verification: While the lender may have extended an offer for a home loan, they will investigate to verify the authenticity of the property you intend to buy. The actual loan disbursement process begins after the property and property documents are verified by the lender. The lender will visit the property and also check the property deed document, NOC etc.
Loan disbursal: Throughout the loan application process, applicants wonder how a home loan is disbursed. After all the above-mentioned formalities are completed, the registration process can commence. The borrower needs to prepare the legal documents as per the format approved by the lender’s lawyers on stamp paper. Stamp duties must be borne by the lender and depend upon the state in which the property is purchased. You also have to submit post-dated cheques towards EMI payments after which the lender begins loan disbursement, partially or completely as per the loan agreement terms.
The home loan disbursement process becomes easy if you are well prepared, have good credit scores and have all your documents in order. India Bulls Housing Limited can help you with your home loan requirements. Just walk into our office or log on to our website for more details.