Creating or buying an own home is a dream for every person, and home loan helps a lot to fulfill that dream. Today we'll see how you can increase the chances of getting your home loan by following a few steps.
How to apply for a loan?
Whether you'll get a home loan, it depends on many factors, such as–
- Monthly Income
- Loan Amount
- Documents
- Eligibility
- EMI etc.
We'll cover all these points here and learn how you can easily qualify to get a good loan amount.
Self Assessment:
Here self-assessment means that you should take care of certain things before applying for a home loan–
Cost of Property:
You need to know how much a fixed amount of loan you need. In simple terms, what you are going to buy or build is – what exactly is going to be the price. Because if you take an extra loan of Rs 1 lakh, it can spoil the entire financial structure of your home loan.
Own Contribution:
It is also important to understand that the bank lends only 70% to 80% of your house's cost. You will have to contribute the remaining 20% to 25%.
EMI Affordability:
You also need to see if you are eligible to repay the loan EMI. Your home loan EMI is better than 40% to 45% of your monthly income.
Loan Period:
The loan tenure should be as short as possible so that you have to pay the minimum interest.
Choose Right Bank:
Selecting the right bank or housing financing company (HFC) is an essential part of the home loan process. Therefore, home loan schemes of different banks should be compared before applying to any bank. That depends on many factors, such as–
- EMI
- Loan Period
- Tax Benefits
- Interest Rate
- Processing Fees
- Loan Agreement
- Terms and Conditions
- Loan Approval Process
- Penalty for Late Payment
When it comes to interest rates, you should see what kind of interest rate you are taking –
It has 2 kinds of interest rates –
1. Fixed Interest Rate: This is fixed throughout the loan tenure.
2. Floating Interest Rate: This varies when RBI lowers or lower interest rates.
Home Loan Documents:
The most important thing in a home loan that causes many people to get a loan is not having proper documents. So it's very important that you need to have all the documents that are connected to the home loan. In general, home loans must have the following documents–
Identity and Age Proof:
- Passport
- PAN Card
- Aadhar Card
- Driving Licence
- Birth Certificate
Address Proof:
- Passport
- Ration Card
- Aadhaar Card
- Voter ID Card
- Driving License
- Lease Agreement
- Rental Agreement
- Water, Electricity & Phone Bills
Proof of Educational Qualifications
For this, you can use your education certificate, degree, and mark sheet.
Employment Details
If you are a Salaried Person, you need to submit information and documents related to where you work.
Income Proof
You can use income tax returns for the last three years for income proof.
Bank Statement
For bank statements, you can give details of passbook and account details.
Property Details
Here you'll need to show your property document and also give it property finalized details.
Apply For Home Loan:
You can apply for a home loan in both online and offline ways. You can talk to the bank officer for a loan application from your own bank. Submit documents by filling in the Home Loan Application Form. In the meantime, you will also have to pay a loan [processing fees (which are around 0.25% to 1% of the loan amount). If you don't want to get into these complications, you can talk to the loan broker all.
Property Valuation:
The bank conducts legal checks of the property through a lawyer. And after investigation, the lawyer issues the legal verification report to the bank. After this, the bank assesses the property's market value through the valuer, and finally, the loan amount to be provided is ensured.
Home Loan Sanction:
Once the entire investigation is over, the bank approves the grant of a home loan. An acceptance letter is issued to the borrower, and the home loan agreement is signed.
Loan Disbursement:
Once the home loan agreement is signed, the borrower can decide the property registration date with the seller of the property. The borrower can write a letter to the bank and request for a demand letter. After this, the bank will issue DD/Bank Check for registration of the property, and finally, the applicant gets the loan amount.
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