Without the support called home loans, most of our dream of buying a home would have ever been a dream only. Once you choose a home to buy, you are to initiate the process of the home loan. A home loan is a financing tool to buy homes. It is a secured loan and contains a number of steps. Generally, a home loan takes a minimum of 15 days to get disbursed. The lender and the borrower both have to come across several steps to reach till the last step which is the disbursal of the loan. Here is a brief step by step guide to the home loan process.

Applying for the Loan

The first step of a home loan is applying for the loan which has to be taken by the loan aspirant. The application may differ from lender to lender. Here in the application form, you are to give the personal and professional information, details of your financial assets and liabilities and if you have selected a property then the details of the same.

Home Loan Assessment by the Bank

The next step of the home loan is the assessment of the loan or checking the loan eligibility. In this step, the lender will have a thorough checking of your loan eligibility and the repayment capacity. Lenders check a number of things such as

a) Income

(b) Age

(c) Nature of Job and Job Stability

(d) No of dependents

(e) Existing Liabilities

(f) Repayment Capacity

g) Verification of job

h) Verification of your residence

i) Credit score

j) Credit report

Legal Verification

If the bank finds that you are worthy of getting a home loan, the lender will proceed to verify the property you want to purchase. The lender will send a lawyer to have a legal verification of the property. They will have a site visit and check the legal documents of the property to check if the property is free from any legal issues or dispute. If the lawyer finds that the property is good enough to be invested, a legal verification report will be given to the bank.

Property Valuation

The next step is to find out the fair market value of the property. The lender sends experts to the site to evaluate the value of the property. This step is taken by the lender to ensure that the appropriate loan amount is approved against the property.

Home Loan Sanction

After the successful completion of the prior three steps, the next step is the sanctioning of the home loan. The sanctioning of the home loan denotes that you are ready to sign the home loan agreement papers. The home loan agreement is like a booklet containing all the terms and conditions of the home loan. If your loan is sanctioned, you will have to initiate the process of registering the property in your name.

Registration of Property Documents

The next step is to register the property at the office of the sub-registrar of your area. At the time of registration, you will need to pay the registration fee and the stamp duty charges to the government.

Signing of Agreements and Submitting Post-Dated Cheques

You will need to put multiple signatures of yours in the documents.  At the time of signing the loan document, you will need to provide post-dated cheques and original documents. Your post-dated cheques have to be for the initial 36 months.

Loan Disbursement

Once all the legal procedures are clear, the loan amount will be disbursed via cheque or demand draft towards the seller of the property. The seller will have to provide the property papers to the bank. This means the sale deed and the mother deed of the property will be in the custody of the bank until the repayment is done in full.

Hurray! Here comes the celebration! Your home loan is disbursed, the property has been registered to your name so you can move to your new home on any day of your choice. The interest on your home loan will start accumulating from the day of sanctioning the loan, not from the disbursal of the loan. Hence, try your best to get the loan disbursed soon so that the occupancy of the new home can be done early.