The Guidebook For Home Loan Application

Buying our own house is a major life event and a dream for most of us. Many of us take the help of a home loan to fulfill this dream. In India, with numerous banks and housing finance companies offering competitive interest rates and a wide range of housing loans with lucrative features and benefits, home loans have become more affordable than ever and have emerged as a wise as well as a popular choice.

If you want to turn your dream of a home into a reality, the first and most obvious step you have to take is to submit a home loan application. While there are countless things to consider before making a home loan application, this comprehensive guidebook will help you answer all of your doubts and questions regarding the home loan application procedure.

General Steps For A Home Loan Application Procedure

Following are the general four steps that come with all of the home loans application procedure:

1. Loan Application Procedure

With nearly every housing finance company and bank with an online existence or numerous branches in every city, a home loan application is now more easily accessible than ever. You can opt to visit the nearest branch of the chosen bank or visit the website, fill up the application form and the necessary details, attach and/or upload the required documents, and submit the application. If these documents are correct and orderly, the further procedure will likely take less time.

2. Loan Approval Procedure

Depending on the lender, the loan approval can take a few hours to several days if all the submitted documents are successfully verified. These documents are to prove your identity, address, employment, income, etc.

Loan approval also depends on several other factors like your employment history, current debt to income ratio, credit score, age, etc. the lender conducts a thorough background check to ensure that all the details and documents you have submitted are factual and not fake. 

3. Loan Sanction Procedure

Sometimes the sanctioned loan amount might be lower than what you had originally applied for because this amount will depend on various factors previously mentioned. 

The factors like your professional qualifications and employment history, age, income, job stability, and repayment capacity, credit score, etc., will also play an essential role in the lender’s final conclusion as to the appropriate loan amount to be sanctioned. 

The sanction letter is one of the most important documents in this procedure issued by the lender to an applicant that specifies all the necessary details regarding the loan and the terms and conditions applicable.

4. Loan Disbursal Procedure

At this last stage of the loan application procedure, the lender will send you the loan documents to fill in and sign, along with any co-applicants, co-owners, or co-borrowers. You will be required to pay the down payment, depending upon the LTR ratio of your home loan, before the disbursement is made. This is generally 20% of the value of the property.

The bank or the lender will legally assess the property documents such as the property’s title deed required to be submitted by you. After the verification of the title and value of the property, the lender will disburse the loan amount, which will be credited to the bank account. 

It is crucial for your home loan application procedure to be faster, smoother, and convenient, to keep all the necessary documents ready and error-free, in addition for you to be eligible for the chosen lender and the home loan scheme.