Applying for a home loan is the first step towards owning the house of your dreams. While the application process is quick and easy to follow, not everyone is familiar with it. If you are a potential homebuyer looking for a home loan, it is imperative to be well-versed with the lender’s home loan eligibilitycriteria and the disbursal process for hassle-free loan approval.
Here are the steps involved in obtaining a home loan.
Filling the application
The process begins with applying with the lender either online or offline. They require you to fill in information such as personal details, residential address, employment, and annual income, property details, and so on.
Submission of documents
Once you have filled the application form correctly, the lender will ask you to submit a list of documents along with it. This includes:
- Identity proof
- Income proof
- Address proof
- Employment details
- Proof of income
- Bank account statements
- Property details (if the loan is finalised)
Additional Read: Top 7 reasons behind the rejection of a Home loan application
Payment of processing fee
After successful submission of the application and the required paperwork, you will have to pay a non-refundable processing fee to the lender. Most lenders charge a fee between 0.25% to 0.5% of the loan amount for the home loan application process. However, you can also negotiate to waive off this charge.
The lender will then assess your application and authenticate your documents. They will get in touch with you at your residence or your workplace to validate the information and credentials you have provided. Moreover, they will also run a credit inquiry and check your CIBIL score to determine your financial stability and repayment capacity.
After the lender finds your application satisfactory, they will move forward with the process and offer you the sanction letter. It contains the following details –
- Loan amount
- Rate of interest
- Type of interest rate- fixed or floating
- Repayment tenure
- Other terms and conditions associated with the loan
Make sure that the letter mentions the home loan interest rateand other terms as discussed.You have to sign a copy of the sanction letter and revert to the lender with your acceptance.
Additional Read: Ways to prevent home loan applications from getting rejected
Before disbursing the loan, the lender will check the property you intend to purchase. You will have to submit the original copy of the property-related documents. They will legally inspect the site to determine that the title is clear of any dispute. Similarly, they will run a technical valuation in case the property is under construction.
Once all the aforementioned formalities are successfully carried out and you agree with the loan terms, the lender prepares the documentation and begins with the loan registration. Home loan processing timecan take up to 2-3 weeks, depending upon the lender. After you sign the final agreement, the lender will disburse the loan as per the terms.
The Bottom Line
Looking for a quick and affordable home loan? Tata Capital is here to put an end to your financial worries! With maximum eligibility, minimal paperwork, and 100% online application, our loan processing is easy and smooth. Besides, you can enjoy a flexible tenure for convenient EMI payments. Use our home loan EMI calculator and get started today!