Key Stages Of Home-Loan Process
Buying one’s own home is a dream come true. It not only settles you but gives you a sense of satisfaction for achieving a substantial goal of life. However, to cherish this kind of a dream, you need to organise the most crucial factor i.e. finance. Thanks to the rise of the home-loan industry in India, you can avail of as much as 90 per cent of the total cost of a residential property. But, to get a loan running into several lakhs, you ought to follow a set of guidelines and procedures under various stages.
The first step is to get cracking on the home loan application. If you have planned to buy a property, it is obvious that you must have also worked out on your budget. It is important to set the budget as it will be the key determining factor of the amount of loan you need to apply for. Even before applying for loan, you need to consider your future expenses once your loan is sanctioned. In simple words, you need to work out your monthly pay-out as EMI (equated monthly installment) to repay the home loan along with the other routine expenses. The amount you calculate as EMI might differ with an actual amount the bank may offer, but this kind of calculation in advance will give you an idea whether it is right or not to invest in that property at that moment. As a thumb rule, the total amount of home loan EMI should not exceed 50-60 per cent of your total monthly income.
Once you figure out this aspect, you can get in touch with any of the banks providing home loan and fill their application form. This requires you to submit some of your legal documents that help the bank to evaluate your eligibility to get the loan.
On receiving the application, the bank assesses your documents and checks your eligibility. In the process, the bank assesses your income, the nature of your job, your liabilities, number of people in your family dependent on you and a host of other details to check your repaying capacity. While doing this, the bank also assigns a person to visit the property and confirm the details that you have provided in the application form.
After evaluating the documents and assessing the property you are intending to buy, the bank provides conditional sanction for your loan. The bank issues a formal letter that mentions its acceptance of your application, along with terms and conditions you need to assume to get the loan sanctioned. You need to read these documents carefully, duly sign them and submit them back to the bank. Along with these documents you are required to provide ECS approval for auto-debiting the EMI every month directly from your bank account and post-dated cheques according to the terms and conditions.
Once the sanction process is completed, the bank triggers the loan disbursement to the seller of the property. The disbursement process requires the seller of the property to coordinate with you for the registration of the property. Simultaneously, the bank provides Banker’s Cheque to start with the disbursement process and register the property.