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A Complete Guide For Home Loan Process In India

Buying a home has become a lot easier than it was once. Be it a studio apartment or a budget home, there is an option for everyone. Furthermore, Indian Government has announced several initiatives to attract even the middle-class buyers. A “Home loan” plays an important role in fulfilling this dream.  It is definitely not as difficult as it was perceived, by keeping certain things in mind and understanding its process before applying for a home loan will help you to travel on a smooth road.

With many promising projects such as “Sai Kalyan ULTIMA” emerging in North Bangalore, it is the perfect time to buy an apartment. We understand that as a smart buyer, you want to get well versed in complete Home loan process and that is why we have come up with this article to help you get a better understanding. So, let’s dive into the topic now.

Home Loan Process In India

Self Assessment:

Before approaching a Bank or a Financial company for a home loan, it is essential to leverage your monetary aspects. After working on your financial conditions, you can visit the bank personally or visit their website to get the information regarding the list of documents that they need in order to apply for a home loan. You need to obtain all the legal documents related to the property from your builder before applying for the home loan.

 The main motive of this self-assessment is to have a clear idea of two things

  • Whether you will be able to pay the EMI and
  • What are the documents that the bank will demand during the Home loan process.

This Self Assessment will help you to evade lost minute tension.

Home Loan Application:

Home Loan process starts with a formal application to the bank or Financial Company. You are required to fill the Home loan application form and submit it along with all the required documents. The application form will be available at any bank office or you can download it from their official Website. There will be a non-refundable processing fee that you need to pay while you submit your form. Furthermore, the documents required for Salaried and self-employed buyers might vary in some areas.

The below-mentioned list is the general list of documents required for Home loan application and it might vary as per Bank norms.

  • Application form with photograph duly signed
  • Identity proof
  • Address proof
  • Age proof
  • Pan Card
  • Proof of Income-Last 3 months Salary-slips
  • Last 6 months bank statements
  • Processing fee cheque
  • Form 16 / Income Tax Returns
  • Business profile (For self-employed Non-professional buyers only)
  • Proof of Educational/Professional qualifications
  • Employment Details (For Salaried buyers only)
  • Proof of business existence (For self-employed buyers only)
  • Last 3 years Income Tax Returns with computation of Income (For self-employed buyers only)
  • Last 3 years CA Certified / Audited Balance Sheet and Profit & Loss Account (For self-employed buyers only)

Home Loan Processing Fee:

As implied earlier, there will be a Home loan processing fee which is non-refundable that bank will charge you for commencing and maintaining process of the home loan. The charges vary according to the bank or Financial Company that you choose and can expect it to be between 0.50% to 1.0% of your home loan amount. Some banks offer processing fee waivers in order to attract customers so you can always negotiate with your bank. However, not all banks are open to this negotiation.

Home Loan Assessment:

After you have submitted your application to the bank along with processing fee, the Bank will start its process. As a first step, your bank will evaluate your application and decide your loan eligibility i.e. the amount that can be sanctioned to you. You would be asked to visit the bank personally for a discussion to evaluate your application and to decide on the loan amount. You can expect a call from the bank in 2 or 3 days after you submit your application form to the Bank. After interacting with you, Bank will simultaneously start verifying the details that you have submitted with the application and bank representatives might visit your house or office to verify the same.

Evaluating repayment capacity:

Evaluating the repayment capacity is the crucial element in this process and Banks need to be satisfied with your repaying ability to sanction the loan for you. In some cases, bank issues conditional sanction and the conditions need to be satisfied by the buyer before the loan is disbursed.

Some of the factors that they consider for your repayment capacity are

Age

Number of dependents

Nature of Job and Job Stability

Salary

Loan repayment Capacity

Existing Liabilities

Though these are common factors, each bank has their own set of parameters that they want the buyer to satisfy in order to sanction the home loan.

Home Loan offer letter:

After the Bank has evaluated your Loan repayment capacity and concludes that they can sanction the loan. Then, the Bank will draft an offer letter with the following details.

Amount Sanctioned

Interest rate (if applicable)

Loan Tenure

Fixed or floating interest

Mode of repayment

Home Loan Tenure

Terms and conditions

Special Scheme (if any)

After verifying all details in the home loan offer letter, you need to sign an acceptance copy and submit it to the bank signifying that you are accepting of all these conditions. This acceptance copy is saved in bank records for future reference and administrative fees (if any) needs to be paid at this stage.

Home Loan Process In India-1

Property valuation and Legal Verification:

Bank will verify your property and conduct a legal check to find out whether the title is clear and with no disputes. Furthermore, the technical evaluation of the property is conducted based on few factors such as construction stage and its progress, the location of the project, Quality of construction, and other parameters related to it. These parameters differ according to the property that you buy, whether it is new or resale. So, the bank person who assesses the property will visit the location personally and do the assessment as per the bank set parameters.  At this stage, you will be asked to submit the original copies of no objection certificate, title deed, and other documents that they ask for.

Registration and Home Loan dispersal:

After successfully finishing all the above mentioned Home loan process and you have satisfactorily fulfilled the parameters, the home loan registration starts. You need to prepare all the legal documents in the format approved by Bank’s lawyer and also should submit the post-dated cheques for the term of the period mentioned by the Bank. Finally, you will sign the home loan agreement papers and the home loan dispersal process starts.

Remember, that the above-mentioned home loan process is common in most of the banks but with slight changes as per individual bank policies.

Important points to remember:

  • The original house documents will remain with the bank and will be returned when you repay the entire loan amount.
  • You are eligible to avail maximum loan equivalent to 80% of property value which is subject to your repayment capacity.
  • Home loan process takes around 10-15 days to complete.
  • If you are staying in a different City and buying property in another city, then you can apply for home loan in either of the cities as per your convenience.

Congrats, you have successfully finished the Home loan process and is ready to sign your Home registration documents soon. The home loan process is a bit lengthy and a tricky one but is not a difficult one though. If you have a clear paperwork and the property that you are buying is legally clear then the loan process will face no hiccups at all. So it is better to look for renowned builders such as Sai Kalyan Builders and Developers who have got solid years of reputation in successfully creating high-quality housing ventures.

The first wing apartments of our latest luxury project Sai Kalyan Ultima has been handed over to our customers on time as promised. It is your time to make a wise decision of choosing us, Sai Kalyan Builders and Developers to ensure that you possess a legally clear property for a smooth home loan process.

Interested in buying a home in ULTIMA? Please visit Sai Kalyan Builders website to know more details about the project.

If you are looking flats for sale near Manyata Tech Park, then ULTIMA is one of the best options.

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