Home Loans Home Loan How to Apply Home Loan? Methods for applying Home Loan

How to Apply Home Loan? Methods for applying Home Loan

Things To Know Before Applying Home Loan

The process of applying for home loan in India begins from filling out application form, submission of documents, payment of processing fees and verification of documents. An applicant must always go through the process of loan application of different banks. He must also have a detailed discussion with the bank executive regarding their requirements.

In every individual’s life, there is a stage at which he desires to own his ‘sweet home’ and plans of buying it soon. An owned house is a safe and secured place for a person. A person always has a sense of belonging and memories attached to his owned house.

The First Step – Application form

In this first step, the applicant approaches the sales office of a bank and gets a formal application form. The form requests specific details about you, your income and your future property. The application form varies from bank to bank. There is no particular format of an application form for all the banks. In this form, you have to fill details such as personal information, residential status, income and employment, education, property details. In addition to these, the form also asks you to specify what the estimated costs of the property are. Do you have any existing means for buying that property? These specific details are asked by the bank to understand the applicant’s financial capacity.

The Second Step – Documentation

Along with application form, relevant documents are also required to be submitted to the bank. These documents need to be complete and valid. Moreover, these must adhere to the facts mentioned in the loan application form by the applicant. Generally, following documents are required to submit along with the application form:

Proof of age
Proof of identity
Proof of income – Salary slips, income statements, and so on.
Proof of current address – whether it is rental or not
Details of employment – job or business
Proof of educational qualifications
Property details in case the transaction is finalized beforehand
Bank statements

These documents help in evaluating the capability of the applicant to repay the home loan. The financial capacity of the applicant can be understood by the income and bank statements as provided.

The third step – processing fee

For all the loan applications, banks charge a certain amount of processing fees from the applicant. This fee is charged for the entire home loan processing function and completion of formalities. The fees cannot be refunded to the applicant.

The fourth step – Taken by banks

The next action is taken by banks to execute the loan application. The bank scrutinizes the application form, verifies the accuracy and reliability of the documents and takes a suitable decision accordingly. In addition, the bank refers to the credit report and CIBIL score of the applicant. The banks try to get an idea about the applicant’s past and existing dues.

You need to have your valid documents ready along with the completed application form. You must understand the bank requirements well in advance. Along with your personal details, you must also be well-versed with your property details.

1 COMMENT

Vandana Agarwal June 23, 2016 at 7:58 am

A very detailed article of the requirements needed by the bank for applying for home loan. It no doubt gives the over all view of the various stages involved in application and processing of home loan. Though the process might differ for diffrent banks but the core remains the same. Kuddos to the author for providing with such a article.