Are you planning to take a home loan to get your dream house? Well, it can be an overwhelming experience for first-time borrowers. You might get confused about where to start.
Using a home loan calculator can be your starting point. It will give you an idea of your EMI and total interest payable. Therefore, you will be able to plan your finances accordingly.
But, what does the process of taking a home loan look like? Don’t worry. We will walk you through it.
1. Fill Up The Application And Submit The Documents
It starts with filling up the home loan application form. Well, you do not have to go anywhere. Most lenders have an online application process these days.
You can fill the form from the comforts of your home. You need to fill in personal details like your name, address, educational qualification, and income. Apart from that, you might also have to furnish the details of your property.
Then, you will have to attach your documents along with the form. Some lenders might even arrange to pick them up from your doorstep.
You have to submit the following documents for your home loan.
- Identity proof
- Proof of residential address
- Income details
- Bank statement
- Educational certificates
- Property documents
2. Pay The Processing Fee
Your lender will process your loan application and verify your documents. Do you think they will do it all for free? Well, you will have to pay a processing fee for it.
Most lenders charge 0.25 to 0.5% of the loan amount as processing fees. Make sure you choose a lending institution that charges less to process your application. That will help you save quite a few bucks.
3. The Lender Will Verify Your Documents
Banks and housing finance companies receive hundreds of loan applications every day. So, they need to make sure that your application is genuine. For that, they will check whether all your documents are valid. That helps them to understand your credibility.
4. Sanction Of The Home Loan
It is the most crucial stage in the home loan application process. Your lender might accept or reject your application. So, what does your lender look at?
Well, they will mainly consider your repayment capacity. Your income is thus one of the primary factors your lender considers while approving your loan. Moreover, they will also check your credit score. If you have repaid all your earlier dues on time, the chances of your application getting approved increase.
Once your lender approves your loan, they will send an official offer letter.
5. On-site Verification
After your loan gets sanctioned, the lending institution might first-time go for a site visit. It helps them to understand the nature of the property and if it has any legal disputes. Moreover, they also get an idea about the property valuation.
6. Disbursal Of The Loan
After all the above steps get completed, you will get the amount in your bank account.
The simple guide above must have cleared all your doubts about the home loan application process. Make sure you check the housing loan interest rate before applying.