Are You Freaking Out on Taking Home Loan? Check Out Simple Steps
Home Loan is a motivation to the Real Estate Market, without it more than half of the population would be constrained to live in rented houses. Moreover, you can be the eminent owner without having a prodigious amount of hard cash.
Buying a home is the most significant sentiment of a person as one invests his whole life earnings into it, and this, of course, is the most significant investment.
The home loan sanction limit will be set based on many factors, such as your age, income, professional qualifications, job stability, and repayment capability. Any outstanding payments, your CIBIL, and your repayment history will also affect the sanctioned loan amount. Keep in mind that the home loan sanction amount may sometimes be lower than what you have requested. Once the sanction process is done, you will receive a confirmation letter.
There is a vast concept gap between Banks and Borrowers that Home Loans could only be availed to purchase a house a borrower could avail it for buying land or constructing on his own will.
If you dream of buying a house but are not able to fulfill it because of low finances or scary paperwork, then take these simple steps:
A borrower will be eligible for Home Loan only if he meets some basic requirements. The criteria of eligibility of borrower include Employment Status, CIBIL Score, Duration of Employment, and total income.
Once the formal application and document submission process is done, the applicant has to pay the processing fee to the bank. This is the amount collected for maintaining the applicant’s loan account. It includes sending some confidential paperwork (like IT certificates, post-dated cheque etc. every year.
Once the applicant has completed the application and documentation process, he or she has to wait until the bank or the respective financial company checks the papers. It usually takes about 1-2 days or even less if the submitted paperwork is correct.
However, there might be times when the bank might want the applicant to pay a visit to the bank for a face-to-face interaction before the loan is sanctioned. This is done to collect more details about the applicant and to make sure if he/she can repay the loan with the interest amount.
- Keep a checklist of documents: Documents include Application Form, Photographs, PAN, ADHAAR, Address Proof, ITR, Income Documents, Property Document, Pay Slip, Co-Applicant Documents, etc.
- Interest Rates: Floating Rates or Fixed Rates, Fixed rates are where the interest rate doesn’t change with market inconstancy, which is higher than Floating rates. The prices may vary from Bank to Bank so the EMI’s may also vary accordingly.
- The best way to manage to cost is by distributing your loan. New owners can actively get better interest rates
- Tenure: Opting Loan is never easy; loan repayment tenure will impact overall EMI.
- Your CIBIL score is your image as the Credit history of the borrower. The bank needs to verify if you have any default or NPA accounts and you can get a loan based on your CIBIL score.
- Check for eligibility before applying for Home Loan.
- There are lots of benefits which the Government is providing nowadays like PMAY a subsidy plan for the financially weaker section of the society.
- Insurance: While applying for Loan, Bank will ask you for Health Insurance which is a mandatory part of the loan to keep themselves on a safe side as far as loan are considered.
The remonstrance for the borrower will be in getting repayment tenure which again may vary from Bank to Bank.
A Home Loan Agreement is entitled to be Legal, and one needs to take utmost care before signing any document.
Home Loan is a lifetime engagement, and once you are into it, you are revolving around it for a lifetime. Generally, home loan borrowers try to pay their EMI before time to avoid total interest and loan tenure.
A personal meeting provides a better understanding of the purpose of the loan. You might be asked about your income, monthly expenses, age, and job stability, before sanctioning a loan. Once the loan is approved, next is the disbursement process.
This Home loan sanction letter validity lasts for around six months. This letter does not mean that you receive the funds right away, but it serves as proof that you are eligible for a home loan.
One can opt for a home loan overdraft available for a loan account. It will not only reduce your loan tenure but will also allow you to withdraw surplus amounts deposited in your loan account in case you need it.
One thing to keep in mind before applying for an overdraft is that you can opt for this facility if you have a super balance available with you.
No requirement of Guarantor
Banks nowadays doesn’t require a guarantor to grant a loan to their customers. Some banks provide accidental death insurance to their customers. These advantages of home loans are responsible for making them accessible among customers. A person who doesn’t have home wants to buy it by taking a home loan, and banks help people in fulfilling their dreams. On the other hand, the process of loan disbursement is little problematic mainly because of legal formalities.
A home loan is a loan from a bank or lender to help you finance the purchase of a home. When you take out a mortgage, you make a promise to repay the money you’ve borrowed, plus an agreed-upon interest rate. Bank will conduct independent Legal Verification of the property through the lawyer. The lawyer will issue the Title Certificate or Legal Verification Report to Bank. A borrower may request a copy of this report by paying nominal fees.
For technical assessment, the bank will appoint Valuer who will fix the Fair Market value of the property. The objective of this exercise is to ensure that the appropriate loan amount is approved against the property.