When you apply for a home loan, the lender will evaluate your loan eligibility based on certain parameters such as your age, credit score, income, etc. Additionally, the lender will also verify the authenticity of the documents provided by you. Following this, if the lender considers you an eligible housing loan applicant, you will be issued a sanction letter.
The home loan sanction letter consists of all the details such as the loan amount, tenure, interest rate applicable, and other general terms and conditions. It must be noted that the sanction letter is not the final loan agreement. It only indicates that the borrower can start the loan process, and the lender is willing to grant the home loan based on certain terms and conditions.
Read further to know the steps that need to be followed from the time the home loan is sanctioned until the loan amount is disbursed.
- Property assessment
The technical officer will examine the property that you wish to purchase. The technical officer will note all the aspects of the property such as its age, internal and external maintenance, surrounding area, etc. In case the property is under-construction, the officer will inspect the stage and quality of construction.
- Submission of property documents
After the property assessment, the lender will ask you to submit original property documents. These documents will remain in the lender’s custody until you repay the loan amount in full. Some of the important property documents that you will be required to furnish include title deed, No Objection Certificate (NOC) from the required authorities, encumbrance certificate, etc.
- Property registration
Get the property registered by visiting the sub-registrar’s office. You will be required to pay your stamp duty and registration charges while registering the property.
- Legal inspection by the lender
The lender will evaluate the property documents including the complete chain of the ownership acquisition. Once the property is found to be free from any legal issues, the legal team will submit a report to proceed further.
- Making a down payment
By availing a home loan in India, you can finance up to 75%-80% of your property purchase. You will be required to pay the remaining amount from your own pocket in the form of down payment. Before proceeding with the loan disbursal, the lender may ask you to provide a proof of your contribution towards the property purchase.
- Loan disbursement
On completion of the above-mentioned steps, the loan amount will be disbursed as per the terms and conditions agreed upon in the sanction letter. Your home loan repayment schedule will begin one month after the loan amount is disbursed. If you purchase an under-construction property, your lender will release the loan amount in stages based on the construction progress.
Being aware of the entire loan process will help you avail the loan amount in a hassle-free manner. You can also consult the lender’s representative for a smooth sanction and disbursal of your home loan.