Ultimate Home Loan Guide for the First-Time Home Buyers
Having our own home is a dream of almost all of us and buying the same is an exciting experience. And when it comes to buying a new home, a home loan is one of the most suitable options. Banking institutions, NBFCs, or even fintech companies are offering great deals on home loan quotations with a flexible and affordable rate of interest. This makes it even easier for people to avail home loans.
Initially, the process might seem complex, but knowing the step will help you get your application approved seamlessly. If you are also applying for a home loan for the first time, continue reading the post to know some useful steps that conclude the process of a home loan.
Document Submission and Verification
The first step that you need to do after selecting the property (in case of a new flat) or getting an estimate from the builder (for home remodelling) is to submit all documents to the home loan agent. The professional will ask for all the documents the lending institution needs to process the application. The list of documents includes the following –
- Proof of identity (Aadhaar card, passport, driving license, etc.)
- PAN Cards
- Income Certificate
- Joining/appointment letter from your employer
- Salary statements (last 1 year)
- Bank statement (last 1 year)
- Form 16 or Income Tax Return (last 3 years)
- Property documents
You need to submit all these to get them verified.
Office or Home Verification
Once you submit all the documents and the lending institution is convinced that you are eligible for the loan and repay the amount, the applicant will have an office and home verification. The verification is done to cross-check the employment details as well as the residential address. Representatives from the lending institution will visit both office as well as the home of the applicant to review the details shared through the documents.
This is one of the most important steps of the whole home loan application process. In this stage, the lending institution will evaluate the valuation of the property, check whether the construction complies with the municipal norms, cross check the property papers before giving the final approval.
This is the stage where the applicant gets a sanction letter from the bank or from the preferred lender with the exact amount of the loan he/she will get at disbursal. The loan sanction amount also depends on the credit score of the application, income and employment. After all these verification and consideration, the exact amount for the loan amount will be notified.
This is the penultimate step, where the applicant needs to sign all the relevant documents. Before the final disbursal of the amount, the borrower needs to deposit 10% of the property valuation.
For example, if the proper valuation is 15 lakhs, the borrowers need to make a down payment of 10%, i.e., 1 lakh fifty thousand, to the builder and proof of which will be shared with the lender. Finally, you will have to share the property’s title deed with the lender, and they will take possession of the same till the whole loan amount gets repaid along with the interest charges.
So, this is the complete process of how the home loan application process moves. Make sure to get a home loan or other loans from a reputed lender to avoid unwanted hassles and disburse the loan quickly. In the comment section, you can also ask questions or share your thoughts regarding the discussion above.