Home Loan guide – Steps involved

When planning on purchasing a house in India the first step is to look for finance. Home loans are great help when you are planning to purchase a home since with home loans you will be able to pay for the home at once and slowly pay off the loan in easy monthly instalments. Both banks as well are home finance groups provide home loans and both these lenders are regulated by the RBI and the national home finance bank respectively. Hence, the procedure for getting a home loan is similar with most banks in India and is as below:

Choosing a house and a home loan provider

Before you actually think about a home loan you first need to decide how much you require for buying or constructing a house. Hence, the first step will be to select the home you would like to purchase. Once you have an idea of how much you require as home loan, the next step is selecting the bank that provides you with one. Though most banks provide home loans to people with a good job and a steady income, no bank provides 100% of the cost of the house you are planning to purchase. A maximum of 80% is provided by the bank and the rest is to be paid by the home owner.

Choosing a home loan provider is easy today. Using the internet and the online websites dedicated to banking and loans it is now possible to compare the various deals provided by various banks. This way you will have an idea of the home loan deals you can get from a particular bank.

Application procedure

Once you decide which bank you would like to approach for a home loan the next step is application for loan. It is better to apply to more than one bank as this helps later during the negotiation phase. Moreover, it is better to apply to such banks for home loan where you have an account since banks provide existing customers with good deals.

Along with the application form, it is essential that submit a few documents like your age, address and income proof. These documents are then verified and if you satisfy the condition pre-decided by that particular bank, you will get a sanction letter. This is the letter conforming that a home loan is sanctioned and the terms of the home loan provided like the amount sanctioned, the interest rate, the loan tenure and the processing fee, etc are provided.

Negotiation phase

Once you get the sanction letter the next phase will be the negotiation or bargaining phase where you will discuss the terms of the home loan provided and get a better deal. Such parameters like the interest rate and the processing fee can be bargained on.

Finally, you will then provide the bank with the document of the house or the property you are planning to buy and the processing fee and after proper verification of the documents the loan amount will be disbursed.

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