The Indian financial market is finally trying to stand after the economic standstill caused by COVID-19. To reintroduce money into circulation, lenders are offering low-interest loans for a long period of time. Furthermore, the proposal in Budget 2021 of expanded tax benefits on home loan repayment has attracted a large number of homeowners interested in real estate investing.
Home loan procedure for application
The following steps formulate the home loan process which needs to be followed for a person acquiring a home loan:
- Fill the application form:
Borrowers begin the home loan procedure by properly filling out an application form. They must provide all pertinent information such as their name, residence, occupation, phone number, monthly income, employment, and financial information, among other things.
- Document Verification:
The next step is to check the documents that have been provided. Because it is such an important part of the home loan process, it may take up to two days, and during that time, lenders may invite borrowers to physically visit their branch for a face-to-face inquiry.
- Eligibility Check:
Before applying for a loan, the borrower must meet certain lender-specific home loan eligibility requirements. A lender does a background check at this stage to determine your repayment potential, which includes factors such as credit history and score, FOIR, and other factors.
- Payment of Processing fees:
Processing fees are charged by financial institutions, including HFCs, and typically vary from 0.25 per cent to 1 per cent of the principal, depending on the lender. It can also reach up to 2% to 3% on rare occasions. These fees are normally non-refundable and one-time payments. Individuals are required to pay it because it is used to continue the house loan process.
- Loan Approval Procedure and documents submission:
When a lender decides whether a loan will be sanctioned or rejected, it is likely the most important aspect of the house loan process. Borrowers learn the maximum loan amount they are eligible for as well as the interest rate at this point. This information is usually sent to the borrower's registered mobile number. After this, the borrower submits the property documents to the lender.
- Loan disbursal:
The house loan process concludes with credit disbursal, which includes accepting the lender's terms and conditions, signing an agreement, and making a down payment on the remaining balance.
There are various housing financial organizations that provide the facility of applying for an online home loan at low home loan EMI for a large period of time. Therefore a borrower who is planning to borrow a home loan should consider these organizations as a suitable option.
Read Also: PROCESS GUIDE TO HOME LOAN APPLICATION
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