Home Loan Process is not that difficult as it is perceived. There is a famous proverb that “Well begun is half done”. The same goes for Home Loan Process. Most of the potential borrowers stuck on how to initiate Home Loan Process. You can apply for Home Loan with or without finalizing the Property. To kick start Home Loan Process, follow these simple steps
Step 1: Self Assessment
Before starting Home Loan Process, visit the website of a Bank / HFC (Housing Finance Company) for the list of documents required. You may collect list of documents from Branch. For simplicity purpose, i will refer Bank or HFC as “Bank” in the post. If you have already finalized the property then arrange the property documents as per the list of Property Documents required by Bank. In this case, Home Loan Process will be fast.
The objective of Self Assessment is to ensure that all documents are in place and to avoid any future shock during Home Loan Process.
Step 2: Apply for Home Loan
Visit the nearest branch of Bank or you may avail services of bank representative who would assist you to complete the Home Loan process. Easiest way is to place enquiry on bank’s website and they would get in touch with you. Fill the Home Loan Application & Submit all the documents along with processing fees.
Step 3: Home Loan assessment by Bank
Next step in Home Loan Process is Home Loan Assessment. Bank will evaluate your application and fix your Loan Eligibility. Some of the factors considered by bank are
(a) Income
(b) Age
(c) Nature of Job and Job Stability
(d) No of dependents
(e) Existing Liabilities
(f) Repayment Capacity
Bank would carry residence, office and CIBIL verification along with other checks as mentioned above during Home Loan Process.
Step 4: Property Valuation and Legal Verification
Bank will conduct independent Legal Verification of the property through lawyer. The lawyer will issue Title Certificate or Legal Verification Report to Bank. A borrower may request for the copy of this report by paying nominal fees.
For technical assessment, Bank will appoint Valuer who will fix the Fair Market value of the property. The objective of this exercise is to ensure that appropriate loan amount is approved against the property.
In case the property you have finalized is already approved by Bank, they may not carry the legal and technical verification again.
Step 5: Home Loan Sanction
After complete verification, Bank will sanction the Home Loan against Property. A sanction letter will be issued to Borrower. Now the borrower is ready to sign Home Loan Agreement. Home Loan agreement will contain all the terms and conditions related to Home Loan. Borrower is also supposed to submit original documents, ECS along with cheques and other undertakings as per the requirement of the Bank to complete Home Loan Process.
Step 6: Loan Disbursement
After the Home Loan Agreement is signed, Borrower may finalize the date of Property Registration in coordination with Seller. Simultaneously borrower may give written request to Bank for Disbursement or Demand Letter. Bank will issue DD/Banker’s Cheque for property registration.
Important Points:
1. You may avail the service of representative of bank who will help you during entire Home Loan Process
2. Original documents of the Property will remain with bank during Home Loan Period
3. If property value is less than 20 Lacs then you may avail maximum loan equivalent to 90% of Property value
4. If property value is more than 20 Lacs than you may avail maximum loan equivalent to 80% of Property value subject to your repayment capacity evaluated by bank
5. In case you are staying in City A and would like to buy a Property in City B. You can apply for Home Loan in either City A or in City B for Property in City B.
6. A CIBIL Score of 750 does not guarantee assured Home Loan approval. Home Loan is approved based on multiple factors and Perceived Risk Profile of the Potential borrower.
7. Home Loan approval is solely at the discretion of bank
8. Stamp Duty & Registration cost is not included in property whereas HFC include the same in Property value. For example, if property value is 50 Lacs and Stamp Duty + Registration Cost is 5 Lacs. Bank will sanction Home Loan equivalent to 80% of 50 lacs whereas HFC will sanction Home Loan equivalent to 80% of 55 Lacs.
9. Home Loan Process takes anywhere between 10-14 days to complete
Hope you liked the post !!
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Thank you very much Nitin for providing the detailed home loan process.
I will not suggest. Its a major deviation and you will face issues in future.
Sir..I hv paid rs 4.6 lacs to builder but I am yet to do agreement with him. While booking property in noida extension he said he will give possession in may2018. The project is in excavation stage. But his agreement says possession will be 3.5 years from date of agreement.when I asked he said these are
Standard norms of greater noida authority and as per law, and he cannot change that but he will gv possession in may18. I m not convinced. But the point his how to extract my money as he will charge 46000 fr nt going ahead wd agreement. But it was he who made false promise. What should I do.pls help asap.
You may go through your agreement with the builder but normally in such cases 10% amount is forfeited by the builder.
Dear Nitin,
Good Day!
I am from kolkata. I am buying a resell flat @ 20 lack.
On 27th Aug 2014, I have a home loan at home loan division of SBI at kolkata. That time I have submitted the following documents:
1. Original deed of agreement
2. Owner deed of registration xerox
3. Mutation certificate
4. Copy of parcha.
5. Kolkata Municipality sanctioned building plan.
And all my personal documents.
After one month the bank called me and tell me that the type of land is not clear from parcha. So they advised me to find out the information of the Dag. No. ( corresponding to the flat) and submit it to them.
So, I do the same and as per the record the type of the land comes out as “BAGAN”. I think it means agricultural land, but at road level ( as per google search). Now I handed over this to the bank.
In the mean type the bank has completed the property inspection, valuation, and searching along with the inspection my personal details. The searching and valuation fees are already paid to bank by me.
Now SBI is saying that they will not issue loan on “BAGAN” mentioned land. Though at present the apartment is under municipality ward (at past it may be under panchayat). SBI is accepting the municipality record, the are asking for B.L & L.R.O office.
Now, please suggest me what to do at this stage? Is SBI is wright? They are cancelling the loan after 50 days. Please suggest.
Waiting for your reply.
Suman
I have already answered this query.
Dear Nitin,
I am looking for a home loan for an individual house. Couldnt get it from SBI since there is a slight deviation in the house compared to approved plan.
Axis bank, LIC housing and ICICI banks are ready to give loan.
My requirement is 2000000INR for 10 Years.
An executive from Axis bank visited my place today and explained abt the loan. He started telling that in the application form, mention 30Lakh Rs so that finally they will give 20Lakhs(Because they will give 80% of what we ask). Is this statement true? Can I go ahead and enter 30Lakhs in the application form though I need 20Lakhs only?
They are offering 10.15% + 0 Margin and ICICI is 10%+0.15 Margin. Which one do you suggest is the good option for me?
Also the executive was pushing me to apply for life insurance!! is this a good option to go with?
Thanks.
I have already answered this query
I am trying to get a loan of Rs. 23 lacs for purchase of
a new house flat. Though, the market value of the property would be around 40
lacs, however, the sale deed will be executed on Rs. 15 lacs (as discussed with
the owner and as per the circle rates).
I approached several banks for taking a loan of Rs. 23
lac and have discussed the same with HDFC, ICICI, PNB, SBI, INDIABULLS. HDFC
and ICICI executives are saying that you will get Rs. 20-21 lacs, for Rs. 15,
sale deed.
While some other lenders are happy to offer me 140% of
the sale deed amount which is in fact Rs. 21 lacs, which not serves my purpose.
I also did the same thing with LIC HFL and they are agree
to sanction me the loan amount of Rs. 23 lacs based upon the documents submitted
for the tenure of 20 years @ 10.10 fixed for 2 years and floating thereafter.
As I understand, after reviewing detailed posts and your
comments, LIC HFL would not be a better option for home loan.
Since I don’t have any lender who finances home loan of
Rs. 23 lacs to me, I am in a big dilemma whether to opt home loan from LIC HFL.
We request you to let me have your precious comments on the same.
I also requested the current PLR which I understand from
the LIC HFL executives is 14.50%. They also indicated that they are currently
charging 10.90% from their existing customers.
I request you to let me know whether I can finalize and
take home loan from LIC HFL and transfer it after completing the 2 years and/or
suggest any other alternative.
Please also let me know if it is possible to add
co-applicant after taking home loan to reduce the tax liability of spouse,
assuming that the property is not in joint name.
Looking forward to your valuable comments.
You can avail Home Loan from LICHFL and transfer after 2 years.
After Home Loan is taken, you cannot add co-applicant.
Have you managed to get 140% of the sale deed amount?
Some banks which have approved the project will not reassess the legal documents, and also check the structure for deviation. So who can confirm if there is no deviation. Also what percentage of structural deviation is acceptable so as to provide occupancy certificate? I am asking this question, since I need to check if OC can be provided by the builder or not, and based on the same, I can get into an agreement with the builder.
You may hire certified architecture to check deviation %. Deviation of up to 5% is acceptable.
OCCUPANCY CERTIFICATE AND Section 310 of the
Karnataka Municipal Corporations Act makes it mandatory for building
owners to obtain completion or occupancy certificates within a month of
completion of the construction. So, if the builder promises that the building will be ready for occupation in June 2015, and OC in December. Does it mean that the structure will be with commercial electricity connection till then. Also his sale agreement clause states that maintenance will be effective once lift and power supply is provided, and does not say anything about power supply, whether it is for domestic or commercial connection. Also no mention about water supply when the apartment would be ready for occupation in June 2015.
Builder may provide private electricity supply through DG or from main meter, he will provide supply to all flats through individual private meter.
I am availing a Home Loan from ICICI bank for Rs 12 Lakhs. Now i am in the disbursement process.I have already paid a processing fee of Rs. 7410/- after which the bank gave me a pre-approval letter for the amount of 12 lakhs. Now i have to handover the originals for the bank amount disbursement.The Bank’s executive is asking for a ‘franking amount’ . on being asked he told me the amount would be 0.2 % of the loan amount plus 610 rupees which will go towards the bank.On being asked repeatedly he is unable to give me clear cut answer.My Question is what is ‘ franking amount’? ideally how much should it be? How is it calculated? and is it necessary to be done? I have already paid the stamp duty and registration through IDBI bank after which they gave me a challan which i handed to the builder and he made the agreement and got it registered at the sub registrar. Could you kindly clarify on the franking amount bit?
I have already answered this query
Hello SIr, where can I find your answer ? I’m new to your blog, please tell me. Thank you,
The reader has posted duplicate query.
Dear Sir,
I am santhakumar from chennai. Recently we had a sale agreement with the builder and i was taking LIC home loan. During home loan process, the LIC agent asked a letter about the deviation which states that “i am aware of deviation in the building .please process my sanction letter and ….”.after that i further investigate the deviation in the net and found that in the cmda approval plan, second floor having one flat but physically in the building it having two flat. i asked about the builder and lic agent. they said it is common now a days and the one flat sq ft is 1600 .no body will not buy this flat. so that they will seperate into two flat (890, 710).
I am in confusing whether i bought this flat or not. i already done a sale agreement .
now what i need to do. is it create serious problem in future. what is the precaution steps to do for this . please note that this flat is under corporation limit. Please advice .
Dear Sir,
i am from Maharashtra.
I have paid down payment cheque to builder
i am in process to avail SBI home loan for new flat from SBI. The whole project is approved by SBI.
Question 1: i want to know what all other charges than 0.35% processing fees to get SBI loan?
Question 2: also builder told that he will give NOC, loan papers set & NOC from their loan bank once we register Agreement of sale with Registrar.
is this correct sequence?
1. Please check following post
https://www.nitinbhatia.in/home-loan/15-home-loan-hidden-charges-banks-dont-tell/
2. No. You should ask for all these documents before property registration.
Hello Sir, I applied for home loan for resale flat, all the process of field verification and home valuation done and bank said to take the bank format which is to get noc from society for mortgage noc. its vijaya bank. Till this time they did not confirmed me, if i wil get homeloan, because they had few queries while processsing home loan. When i asked pls confirm me if my home loan approved, they said you will get. I am just very tensed with all the process and when i will get check. The process had been very long. please tell now what processes is remaining after this? will i get sanction letter? after this stage of process i am confirmed that i will get home loan? Just very tensed about home loan my first investment. Thank you
Hello sir I intend to sell my flat society is not formed yet. Buyer intends to take home loan please advise can I handover original agreement and registration paper to buyer before full payment? Is there any risk
Ideally what should I ensure going for registration only after full payment is recieved etc etc
Pls advise
Original documents should be handed over only at the time of receipt of full and final payment.
Hi sir
Thnx for revert but will not bank ask for original papers that I s agreement to sale and registration documents between myself and builder ? without that will they release cheque in my name?
All original documents are handed over at the time of registration. I am not sure which bank is asking for original documents in advance. You can submit photocopy of all the property documents for the home loan processing of a buyer.
thnx sir
Sir,
I went for applying home construction loan to SBI, they have asked me to approach their advocate and valuer (shared their contact) on my own and get back with the relevant reports from them.
Isn’t the bank not supposed to do this on its own?
I have been asked by the advocate and valuer to pay their fee directly.
It sounds rather odd for us to do things that banks have to do for which their charge us processing fee.
Is this normal?
Thanks,
Pradeep
Unfortunately this is how SBI works..I can understand your concern but nothing much can be done.
Hi Pradeep, Can you share contact details of advocate and valuer. Looks like I need to do the same.
sir do bank provide loan to buy a 20 year society flat( 25 lakhs) ??
Yes but it depends on other factors also.
sir if i resistered the land as normal resistration and have sale deed mutation papper not special or housing resitration of land still can i get home loan if i am regular ecl employee
Provided you fulfill banks eligibility criterion, you can avail home loan for construction.
Hlo sir… Is it pissible to give different estimations for the registeration (45L) and housing loan (60L) whereas the actual market price of the property is 90L
Brand new property – Its a land (1200 Sqft) along with three floors (~2600 super builtup) in bangalore BBMP
This is how the seller is asking me to do so…
Thanks…
I will not suggest
Dear Mr. Nitin, does the NBFC from which i am going to take loan assure that property I am buying is marketable and has not violations in layout plans or any illegal construction.
do they give proof of same, my NBFC preferred is DHFL in this case.
Please advise.
If they charged you legal fees then you can demand title report from DHFL.
Dear Sir,
I intend to buy a1 RK flat in a building at Borivali, Flat size is 180 sqft approx. The building is 15 : 20 year old. Can i get home loan for this flat?
Prima facie you can avail home loan.
Dear Sir,
I have bought a flat in Gaur Yamuna City ,G.Noida
which is approved by Indiabulls housing Finance Ltd.(IHFL) &
India Infoline Housing Finance Ltd. (IIHFL).
So is it fine to avail loan(25 lakhs for 15 years) from Indiabulls as he is charging only RS 1700.
what’s your personal opinion.
Thanks
I will prefer a home loan from bank like SBI, ICICI Bank or Axis Bank.
Dear Sir,
I want to buy a floor costing Rs 60,00,000/-, but I am confused about where to take loan.. As I am trying to chooes the cheapest one… My mother will be co-appliant with me..
You may check with SBI or ICICI Bank.
Hello Sir,
I applied for home loan with HDFC Bank. I have a doubt that my loan may or may not be sanctioned and my income is not high. But the bank representaive says that seeing your documents and past history you’ll get the loan.
Now the Bank guy is asking me to pay 11,000 cheque for processing the loan.
I am worried if my loan is rejected then I’ll lose my 11k.
Shall I go with the word given by the bank representative?
Awaiting reply.
If there is doubt you can give him PDC towards processing fees.
Sir,
I want to buy a property in Mumbai. I applied for presanction of home loan of 20 lakh from HDFC bank Visakhapatnam andhra pradesh. Now i got email from bank representive that my loan is approved. I already send them email that i want to buy property in mira road Mumbai.
Sir, i want to know what is my next step for buying a property in mumbai. I am going Mumbai this weekend for 12 days. So i want fast processing.
Thanks…
Mithun Singh
Please check my following post
https://www.nitinbhatia.in/home-loan/how-to-buy-house-with-home-loan/