Recently, owing to a reduction in repo rates, interest rates applicable on housing loans decreased considerably, making them an extremely affordable credit form. In addition, factors such as stamp duty cuts, lower EMI, and tailored features offered lending institutions have boosted home loan demand.
A home loan is a convenient credit variant that individuals can utilise to purchase residential property against an attractive interest rate.
This demand for a housing loan is prominent among first-time borrowers who desire to own a property. However, many individuals often face difficulties in understanding the home loan process and repayment structure.
An applicant must check the following factors and steps involved in availing a home loan for a hassle-free experience.
Factors to check before selecting the apply for home loan option
A home loan borrower has to fulfil specific criteria before proceeding to home loan apply online option.
Eligibility– Eligibility criteria to avail a home loan is quite simple and minimal. Any individual with a stable income can avail this credit form without hassle. These parameters can vary according to lenders.
Ideally, salaried individuals have to meet criteria like –
- Age between 23 to 62 years.
- Must be an Indian resident.
- Must have a minimum work experience of three years or more.
For self-employed individuals, the eligibility norms are-
- Applicants should be aged between 25 to 70 years.
- Must have an Indian resident.
- Business vintage of five years or more.
Documentation – Ideally, documentation under the home loan process is quite convenient and easy to follow. Mentioned below are few of the documents required to complete the home loan application process –
- Identity proof
- Address proof
- Income proof
- Balance sheet
- Bank statements
- Income tax return
- Documents showing five years of business continuity for self-employed
Apart from the above mentioned documents, some HFCs may ask for additional papers to prove creditworthiness. Therefore, it is smarter to research well about the lists of all documents one need for a home loan.
Home loan application process
- Filling the form
The housing loan process begins with filling the application form with personal details. Typically, information such as name, residential address, estimated cost of the property, employment details, and income profile is required for the application process.
After filling the necessary details, a potential borrower has to attach the mentioned documents in PDF format.
- Payment of processing fees
After submitting the pre-requisite documents, an applicant has to pay a processing fee. This is charged to maintain a borrower’s loan account. Here the amount may differ according to a lender’s policy. If an applicant has a good CIBIL score, they can also negotiate to reduce the processing charges.
Many HFCs disburse around Rs.3.5 crore against their home loan and charge a nominal processing fee for the same. They also provide pre-approved offer against certain products like home loan, loan against property, etc. to expedite the application process. Check your pre-approved offer by filling your name and contact number.
- Evaluation of documents
NBFCs nowadays send a loan representative to the client’s premise for document verification. If the applicant submits genuine documents, the loan disbursal process becomes swift and hassle-free.
During the home loan document verification, the reference listed by applicants is also evaluated for reliability.
- Sanction of loan
This is a crucial part of the housing loan process. A borrower’s documents go through rigid scrutiny and checking. If a lender finds issues with the papers or eligibility criteria, the application can get immediately cancelled.
Hence, it is essential to keep the documents required for a home loan approval handy. The financial institution communicates the maximum disbursed amount with the applicant. If the borrower agrees, an official policy letter is sanctioned.
- Property inspection
The property pledged goes through inspection and evaluation before loan disbursal. Documents like the legal check of a mortgage’s value and authenticity of NOC, certificate, a title deed, etc., are evaluated.
- Loan disbursal
After an applicant signs, the agreement and legal procedure are clear; the loan amount is sanctioned.
A home loan is easy to access if the applicant is well oriented with the loan disbursal process and documentation. In-depth knowledge about the steps mentioned above makes the application process swift and hassle-free.
Read Also: What is home loan processing fee?