Housing Loan Procedure

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Housing Loan Procedure
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• Owning a home is an important thing in life. It
  is a long cherished dream for many. These days,
  there is a great increase in the property prices
  in India. And so, buying a house in a single
  payment is difficult for many people. Therefore,
  many people go for housing loan and it makes the
  process of buying a home easier. Many
  nationalized and private banks offer housing
  loan. There are also some housing finance
  companies in India which offer Housing Loan. In
  India, the housing loan procedure includes few
  steps. It may be small process for few people, if
  they have all the documents required in the
  process. For others, it will be a long process.

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Housing Loan Procedure in India

• Choosing a Housing Loan
• While choosing the best housing loan plan, you
  have to study a lot and figure out which housing
  loan plan fits best to your needs. Figure out
  your financial status in the coming few years so
  that you have a rough idea of your resources in
  the coming years and choose the housing plan that
  suits you.

4
Submission Of Application Form

• Once you have figured out the plan you need, you
  have to submit the application form to the Bank.
  You will also be asked to submit some relevant
  documents along with the application form. These
  documents may vary for different banks. These
  documents are used to make sure of your income,
  age, residence, employment and many more. At this
  stage, you have to pay processing fee for the
  loan to the Bank. This processing fee is
  non-refundable. This processing fee will be about
  0.5-1 of the loan amount.

5
Validation of the Information

• Once you have submitted the form and the relevant
  documents, the bank will start to validate the
  information provided by you in the application
  form. The bank will check your residential
  address, your place of employment and so on. The
  Bank performs a number of checks to ensure that
  you will be able to repay the loan amount.

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Issue Of Sanction Letter

• After these checks, the bank issues a sanction
  letter. This letter contains the details such as
  loan amount, rate of interest, monthly reducing
  balance, mode of repayment and general terms and
  conditions of the loan. This is the approval of
  the money lending procedure by the bank. But, the
  money will be sanctioned only after the documents
  and the property for which the loan is being
  granted is thoroughly verified.

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Submission Of Documents

• Once you get the sanction letter, you have to
  leave the entire set of original documents of the
  property being purchased with the Bank as
  security for the loan amount sanctioned. The bank
  will have all these documents until you totally
  repay the loan. Once you give the documents to
  the Bank, the Bank will verify all the original
  documents.

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Validation of Property

• At this stage, the Bank conducts a site visit to
  your property to ensure that there are no
  violations in the construction. Once the Bank has
  confirmed that the property is legally and
  technically clear, and if they are satisfied with
  the property, they will disburse the loan amount.

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Registration of Property and Signing of Agreements

• At this stage, the registration of your property
  takes place. And now it is time for signing the
  final agreement of the home loan. After signing
  the agreement, you must hand over a bunch of Post
  dated cheques as agreed on the agreement paper.

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Payment Procedure

• After the bank ensures that financing the
  property involves no risk, they pay the amount
  that is agreed upon. At this stage, the money is
  given to the builder or the owner of the
  property. The money will be disbursed based on
  the construction stages of the property. The
  payment may be full or part based on the
  construction stage of the property. In case of
  resale or a completed project, the loan will be
  disbursed in a single installment. If the
  property is under construction, then the loan
  amount will be disbursed in installments
  depending upon the construction stages.

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