Who doesn’t want to have their own house?
It gives you the security that you cannot get from living in a rented house. However, building a house is not an easy task.
You need to invest your life’s savings in it. Well, applying for a home loan can ease your task. You can repay the loan in easy EMIs.
The application process for a home loan might overwhelm you if you are a first-time borrower. But there is no reason to worry. We will walk you through the process in a few simple steps.
- Do Your Research on Different Lenders?
Almost all banks offer home loans. But you must compare the interest rates offered by different banks. It will ensure you get the lowest rate.
Moreover, you should also consider the other charges like processing fees. They can cost you a significant amount. So, go for a lender who charges minimum additional fees.
- Fill in The Home Loan Application
After you decide on your lender, you need to fill in the application form. Most lenders have an online application process these days. So, you do not have to go anywhere. You can fill the form from the comfort of your house.
You have to furnish your personal details in the form. It includes
- Your name
- Official address
- Educational qualifications
- Monthly and annual income
- Details of the property you are purchasing
- Document Verification and Background Check
Your lender will verify all the documents you have submitted. It can take a couple of days. This verification assures the lending institution that you are capable of repaying the loan. Make sure you check all the documents required for home loan before applying.
Apart from that, the lender might also conduct a background check based on the information provided by you. They might even visit your residential address and the site of the property you are purchasing.
- Payment of Processing Fees
You have to pay a processing fee to the bank for all their efforts. They verify your documents, conduct the background check, and process your application. Well, they will not do it free of cost.
Most banks charge somewhere between 0.25% to 0.5 % of the principal amount. Check with different lenders and choose the one that charges the lowest processing fees.
- The Bank Approves Your Loan
It is the most crucial stage. The bank will decide whether to approve or reject your loan. To increase the chances of approval, you have to submit all the necessary documents.
After the bank approves your application, they will send you the official sanction letter
- Processing of Property Documents and Loan Disbursal
On getting the sanction letter, you will have to submit the property’s title deed to the bank. They will keep it with them till you repay the loan. It acts as a security in case you are unable to clear the debt.
Finally, the bank will disburse the loan amount in your account.
To boost the chances of approval of your loan, make sure you have a regular and stable source of income. Also, do not miss out on any documents.
We hope this guide has cleared all your doubts about the home loan application process.