Taking a home loan is the first step towards owning your dream house. There are several procedures that you need to follow while applying for a home loan. If you follow all the procedures step by step, it will not overwhelm you.
The procedures may differ from lender to lender, but certain procedures are the same everywhere. Some of the standard step-by-step procedures are described below that you need to abide by during your home loan application process.
Fill Out the Application Form and Provide the Necessary Documents
The first step of taking home loans starts with filling out the application form. You need to put some basic information on the application form, such as personal details, residential address, educational information, employment details etc. after filling out the form, you need to provide all the essential documents with the lender’s needs. Some such documents are your age proof, address proof, income proof, bank statement, property details etc.
Pay Processing Fee
The next step is to pay the application processing fee, different for different banks or lenders. This processing fee is taken to maintain the applicant’s loan account. During this process, you may require to do some paperwork. The processing fee may range from 0.25% to 0.50% of your loan amount.
Discussion with Your Bank
Once you fill out the application and submit the documents, the banks generally take 2-3 days to verify them. Then you are supposed to discuss any query or doubt with the bank. During this face-to-face interaction, the bank clears all your doubts and answers your questions until you are satisfied. Moreover, the bank may also ask for more details about you. They may even try to ensure that you would be able to repay the loan within a specific loan repayment period.
The Approval/Sanction Process
This is certainly regarded as the most vital process as it determines whether you will get the loan or not. If the bank is satisfied with your application and documents, they will approve your loan request; otherwise, they will reject it. The bank is supposed to double-check all your documentation to ensure your identity and capability to repay the loan within time. You can go to loan agents for the necessary advice or guidance on this.
Processing Offer Letter From the Bank
If the bank approves your home loan application, they will process the offer letter for you. You are thus supposed to get a certified offer letter that mentions details about your approved loan, such as the loan amount, the interest rate you need to pay, the loan repayment period, your monthly EMIs, the terms and conditions etc.
The Loan Disbursal
The last step is to disburse your loan from the bank. Some other small procedures need to go through, but those procedures differ from bank to bank. The loan amount is given to you by the bank through a cheque or cash, whichever way you prefer.
You can thus understand the step-by-step procedures required to follow to get your home loan application approved by a bank. You must follow every step diligently to increase your chance of getting accepted for the loan.