Know how your home loan is processed

As an aspiring homeowner, understanding the steps involved in acquiring a home loan in detail can help navigate seamlessly. 90% of residential property purchases happen with the help of a home loan. There are eligibility requirements to be fulfilled for the loan and JLL is here to help find the right loan scheme for you.

Here’s all that you need to know about your home loan and its process:

Loan Application: While applying for a home loan, it is advisable to research which bank/scheme works best for you and if you are eligible for the same. The loan application form is a tool for your bank to know you. It is a basic document that requests for your personal details such as name, contact details, residential and employment address, educational qualifications, source of income, annual/monthly income, IT returns etc.,

KYC Documents: The bank will require documents that support your answers in the loan application form. You will be required to furnish identification, employment, bank statements and income details along with those of the residential property that is to be purchased, such as the down payment, and the cost of the property among several others.

Processing fee: This charge is a one-time fee paid to the bank by the home loan borrower towards processing and maintaining the home loan account. It may range anywhere from 0.25% to 0.50% of the principal amount of the home loan.

Due diligence by bank: The bank then runs a thorough background check based on the information provided by you in the document collection stage. This is to verify your credentials, credit score, and confirm authenticity of your repayment capacity within the stipulated time. For a housing loan to get sanctioned, the bank invigilates your personal credit worthiness and the if the developer is legally compliant to the norms.

Loan sanction: Once the eligibilities are met, the loan is approved and you will receive a sanction letter that comprises of the loan amount, rate of interest, tenure, if it is fixed or floating, monthly EMI, markup rate, terms and conditions of the letter including validity of the sanction letter. Post acceptance of the presented offer, you will have to comply with the bank’s final round of documentation.

Loan agreement: Finally, the bank drafts a legal document called the loan agreement. This document provides legal protection for both the bank and you (the borrower). It contains an accurate break down of the transaction in detail.

Loan disbursal: The loan of said amount is disbursed in full (for ready-to-move in/resale properties) and in part (for properties under construction). In alignment with the bank’s policies, it is credited via various forms to your account within the promised time.