Applying for a home loan? Here's a step by step guide to the procedure

Opting for a home loan is one of the first steps toward buying a house. However, there are a number of steps involved in it. If you are interested in exploring financial options to buy your dream place, here is what you need to know:

Here is the basic process for a home loan:

Submitting an application:

First, you need to select your lender. Then fill out the application form for a home loan. Make sure you have all the required documents. You also need to fill in information related to the property, like its estimated cost and other details. If you are applying for a joint loan, the co-applicant should also submit the same set of documents. The home loan application form must also be signed by both.

Processing fee:

You also need to pay a processing fee, which is a small percentage of the loan amount. This is paid as an administrative charge to the bank and is non-refundable. Most banks charge 0.25 to 0.50 per cent of the loan amount as the processing fee.

Document verification:

The bank scrutinises the documents submitted by the applicant like their proof of income, ability to pay the loan, identity proof, and more. A background check is also done to verify the applicant’s details.

Legal and technical verification:

The banks will also carry out a check on the property mentioned in the loan documents to assess its market value.

Offer letter:

After verifying the details of the borrower and the property, the lender may sanction the loan. A decision about the same will be intimated to the applicant via an offer letter. The letter will contain details like the total sanctioned loan amount, tenure of the loan, interest rate, and the terms and conditions that must be followed by the borrower.

Disbursement of loan:

Before the loan amount is given, the applicant has to sign the loan agreement and submit post-dated cheques for the duration both parties have agreed upon, or 36 months. Once the borrower signs the offer letter, submits the original title documents and raises a disbursement request, the bank will make preparations to give the money to the applicant via a cheque.

Read all the Latest News , Trending News , Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook , Twitter and Instagram .