Home Loan Procedure

With the increasing competition in the market for offering Home Loans, the otherwise tedious process of availing loans has gone a tremendous change in the recent years. However, there is still some process involved in the procurement of Home loan. It is advisable for you to first look at the different stages required for obtaining a Home Loan. The followings are the step by step procedure of getting home loan:

Step 1 : Application form
The first step involved in applying for home loan is the procurement of application form from the HFC of your choice. The Performa of application every HFC (Housing Finance Companies) is different from the other but about 80% information required to be furnished is the same. Along with the application form necessary documents like address proof, age proof, proof of income, bank balance etc. are also to be attached with the application form before it is submitted to the HFC. Along with all these documents HFCs also ask for processing fee of the home loan that varies 0.25% to 0.50% of the total loan amount.

Step 2 : Personal Discussion
After successfully filling the application form and submitting it to the authority the next step is face to face with bank or HFC where you have applied for the home loan. The bank first evaluates the papers submitted and summons the applicant for the personal discussion regarding the home loan applied for. It is advisable that you carry all your original documents of whose copy you have submitted along with the application.

Step 3 : Bank's Field Investigation
The next step is the field investigation done by the HFC or banks. They sent their representatives to the existing residence of the applicants or their offices for the validation of the documents submitted. This is the essential part for the banks to establish the trust with the applicants.

Step 4 : Credit appraisal by the bank and loan sanction
This is the make or break stage of the process. The bank or HFC will establishes repayment capacity based on your income, age, qualifications, experience, employer, nature of business etc. to access your credential. The bank can refuse your loan application is any discrepancy is found at this stage. But if every thing goes according to the conditions negotiated by both the parties then the bank or HFC sanction the loan that may be unconditional or with some conditions levied.

Step 5 : Offer Letter
After the sanction of the Home Loan, the applicant gets offer letter from the bank or HFC with the following details:

• Loan amount
• Rate of Interest
• fixed or variable ROI
• Tenure of the loan
• Mode of repayment
• General terms and conditions of the loan
• Special conditions, if any