The process of getting a housing loan sanctioned by the bank can be an extremely challenging task especially for those who fail to understand the concept. An incorrect approach can not only lengthen the entire process of loan approval but also lead to a disappointing outcome. Let us have a look at the procedure of obtaining a home loan:
It is essential to firstly locate the most suitable home loan programme, access its application form and fill in the necessary details. In spite of belonging to different financial organization, most home loan application forms generally ask for the applicant's basic information like his/her personal & professional information, including liabilities/assets/property details. Before submitting the form, it is advisable to pull out your credit report which has the ability to impact the mortgage rates considerably. If your score is between 760 & 850, you would be charged a low interest rate, whereas those whose scores fall between 620 & 639 would have to bear higher rates. Those with a poor credit score are recommended to improve their rating before applying for a home loan.
After thoroughly filling & submitting the form, the applicant would be asked to meet the home loan officer in person for conversing about the fine points of his/her loan application. The applicant may also be quizzed about various questions related to his requirements on home loan and repayment plans.
If the loan officer is convinced with his discussion, the next process would be undertaken by the financial organization, which would confirm & verify the details provided by the applicant regarding his place of work, income, designation, residential address, work/residence phone numbers etc. Bank representative officers are appointed to gather these relevant facts so as to ensure that the applicant is genuine. While carrying out this process, if the bank finds out that any of the information provided by the candidate is untrue, his/her loan application will be declined or rejected on faulty grounds.
After successfully verification, the bank would further call the applicant for a final interview session with the senior loan officers to get an in-depth analysis of the exact loan amount, repayment plans, interest rates, loan tenure and additional terms & conditions laid down by the bank. During this final meeting, the applicant is also expected to submit the registered documents of the property he/she is interested in purchasing with the loan amount. A financial organization would sanction the home loan only after verifying the property details, including its market value.
After ensuring the completion of all technical & legal formalities, the bank will now undertake the final decision of loan approval.
If the applicant's home loan is sanctioned by the bank, he/she would receive an offer letter confirming the same, after which it is mandatory to sign the loan agreement with the bank. Make sure that you read each and every point mentioned within the agreement before signing it & clear your doubts, if any, with the concerned officials.
Every bank follows certain guidelines for granting a housing loan. After signing the agreement, the applicant is further expected to submit postdated cheques for a specific period of time (mostly 3 years) to the bank. After ensuring that the entire process has gone smoothly, the bank would finally transfer the property ownership documents in the applicant's name. Most banks arrange to pay for 85 to 90% of the loan amount and the applicant is expected to pay the rest in the form of a down payment.
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