Five Steps for Availing A Home Loan
Availing a home loan or obtaining a mortgage loan, is a relatively simple procedure if you have some capital for an initial down payment, solid credit, and a property in mind.
Following are the few steps which will help you to avail the best home loan deal:
Step 1: Submit the Home Loan Application form along with relevant papers
The finance company will process your loan application to check your Home Loan Eligibility based on your income and personal profile. Usually, an upfront fees which are non–refundable of about 0.5 – 1% of the loan amount must be paid before processing begins.
Step 2: Verification of the property and supporting documents
A company representative may visit the property as well as your residence to verify the information submitted in your application form. Further, a property valuation may be carried out by the company to determine the maximum amount they are willing to lend you.
Any references submitted by you in the Application Form may also be contacted. You may be personally interviewed, and any further clarifications in the documents submitted may be sought.
Step 3: Sanction of the loan
A sanction letter is issued which you will have to sign. This letter will contain the amount and the terms of the Loan. Some companies specify the period for which the loan sanction is valid. You will have to pay a Commitment fee (normally 1% of the unutilised loan amount) if you do not draw on the entire sanctioned amount before that period.
Step 4: Submission of the original Property documents and signing the loan Agreement
You will be required to leave the title deed of the property to the company as a security for the loan. You will be required to go to the company’s office to execute the legal loan papers.
Step 5: Disbursal of the Loan Cheque
You can draw the loan in parts depending on the stage of construction of the building. Until such time, that the entire sanctioned amount is NOT drawn, you will pay a simple interest on the Actual Amount drawn (without any principal repayments). The EMI payments will commence only after the entire Sanctioned Loan Amount is drawn.
All leading Housing Finance Companies in India like HDFC Bank, SBI, ICICI Bank, Indiabulls, Bank of Baroda, Reliance Consumer Finance, etc. follow the above mentioned steps for processing home loan application forms for their clients.
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