Every person wishes to possess their own home. It’s a means to ensure long-term security that comes with owning a home rather than renting one. However, purchasing a home is a difficult task. The technique of purchasing a home is outlined, whether it’s years of funds to be put down as a deposit or locating a suitable location to invest in. Most people believe in applying for a home loan because property investment requires large sums of money. You’ll get a home loan and pay it back in easy equated monthly installments (EMIs) over a period of up to 30 years.
Individuals who intend to apply for this credit instrument should therefore gain a thorough understanding of the application process in order to minimize delays.
The following is a step-by-step guide to the process of applying for a home loan:
Fill the application form
The first step in obtaining a home loan in India is to complete an application form. The application form is the most basic document in which you must fill out your personal information, such as your name, address, phone number, occupation, monthly and annual income, and educational records, among other things. The borrower should also provide information about the property he wants, as well as an estimate of the property’s cost and a deposit that is within his means. In the form, the borrower must include proof of identity, address, income, income certificates, ITRs for the previous three years, bank statements, and other documents.
Submit the documents
Selected lenders additionally offer a doorstep service in which representatives deliver documents to an applicant’s registered address. Submit the following papers to verify the information provided on the application form: This includes KYC documents, residential proof, income proof, etc.
Verification of documents
The bank verifies the documents you submit after you submit them. Banks may take up to two days to verify your documents. It is an important part of the home loan process. You may even be asked to go to the bank for an in-person interview at this point. This is typically the bank’s technique of confirming that you’ll be able to repay your loan within the specified time frame.
Banks evaluate your documentation and run a background check on the borrower. To this end, the bank may perform an inquiry based on the information you provided in the form. This include your past and present addresses, your employer’s credentials, office contact information, and so on. Lenders also obtain your credit report from credit bureaus. A credit score of 750 or more is regarded as acceptable, because it indicates how consistently a person has paid off prior loans.
Sanction letter and payment
The lender will provide a sanction letter summarizing the factors. This include loan amount, home loan interest rate, tenure, terms and conditions, and so on, after validating the facts. Individuals must sign and submit this sanction letter to the lender in order to accept it. Pay the one-time secure costs after that. This payment may be demanded by a lender at the start of the application process.
Legal and technical checks
The majority of lenders send representatives to the property to conduct legal and technical inspections. Applicants will receive an agreement letter after all of the checks have been completed. As a result, the financial institution will disburse the loan funds in accordance with the agreed-upon terms.