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May 17, 2022

Home Loan Guide Step By Step Procedure – Effective Process

Are you looking to buy your dream home? If yes, then most probably you are searching for a Home loan guide step by step. Below, we will be discussing the step-by-step guide to the Home loan procedure. There may be some differences in loans from one lender to another. We have listed the general procedure that will be common to all the banks.

Follow the below steps to make your home loan application process smooth and hassle-free. In case you want loan consulting services then we have a team of financial experts you can talk with. For more information, contact us.

Home Loan Guide Step by Step

Here are the steps to complete the home loan process:

  1. Firstly, fill out the home loan application form and attach the important documents
  2. Pay the loan processing fee
  3. Discuss with the Bank
  4. Valuation of the documents
  5. The approval process
  6. Processing the offer letter
  7. Property papers followed by a legal bank check
  8. Technical check and the site estimation
  9. The final loan deal
  10. Signing the agreement
  11. The loan disbursal

Home Loan Guide Step-by-Step guide and required documents and procedure

Let’s see the steps for applying for a home loan with the required documents, fee, interest rates and paperwork.

Step 1 – Fill the Loan Application Form and Attach the Important Documents

The process of taking home loan begins with an application form. You have to fill the loan application form and submit the required documents. The application form will ask few basic information about the applicant, usually the loan application form includes.

  1. Personal details of applicant
  2. Address of the applicant
  3. Monthly or yearly income
  4. Educational information
  5. Employment details
  6. Property details
  7. Estimated cost of the property
  8. Present means of financing the home property

Once your loan application is filed, the next step you have to do is attach all the required and valid documents asked by the bank with the form. It includes the following documents

  1. Income proof
  2. ID proof
  3. Age proof
  4. Address proof
  5. Employment details
  6. Educational proof(school/ degree certificates or diploma)
  7. Bank details
  8. Property details on which the loan is applied

Step 2 – Pay the Loan Processing Fee

Once you completed the process of submitting the loan application form with the required documents, you will have to pay the loan processing fee to the bank. This is the amount which is collected by the bank for maintaining the applicant’s loan account. The fee is charged for sending some confidential paper work like post-dated cheque, IT certificates etc. The home loan processing fee of the bank usually ranges from 0.25% to 0.50% of the requested amount.

Step 3 – Discussion with the Bank

Once the documentation process is completed, the applicant has to wait for the time until the bank or the respective financial company checks the papers properly. And this process usually takes 1 to 2 days or even less if your paperwork and documents are perfectly valid and has no errors.

The bank may want a face to face interaction with the applicant before the home loan is sanctioned. This is done to collect more details about the applicant and to make sure he/she is a genuine and eligible customer who is applying for the loan.

Step 4 – Valuation of the Documents

Generally, banks approves the paperwork fast because every day millions of people applies for home loans. The applicant has to be genuine in the entire procedure. If any fake document or illegal activity is found by the bank, your loan application will be rejected.

Once the documents and the application form are submitted and the loan processing fee is paid, the bank authority will evaluate them.

Step 5 – The Loan Approval Process

The loan approval is one of the most crucial stages of home loan or any other type of loan process. The loan can be processed or rejected. The approval process is all in the hands of the bank. If the bank is not satisfied with any of your documents, most probably the loan approval changes will be very less. However, if everything goes well, the loan will be approved by the bank in no time.

Step 6 – Processing the Offer Letter

Once the loan is sanctioned or approved by the bank, you will receive a certified offer letter by the bank. The letter will contain the following details:

  • Loan amount that is being sanctioned to the applicant
  • The interest rates on the total loan amount
  • The interest rate is fixed or variable
  • The loan’s tenure details
  • Mode of the loan repayment
  • Terms, conditions and policies of the home loan(read them carefully)

Step 7 – Processing the Property papers followed by a Legal Check

Once the offer letter is accepted by the loan applicant, the bank next concentrated on the home loan property he or she intends to purchase. If the processing is not finalized, the applicant can request for a time duration.

Step 8 – Processing a technical check and the site estimation

Banks are very cautions about giving the loans to the customers because no bank want to increase their NPA. That’s why they double-check the documents and do some private verifications sometimes to make sure that they are not giving a loan to a defaulter.

The bank sends a property expert to check the premises, and the applicant tends to buy.

Step 9 – The Final Loan Deal

Once the technical and the site’s estimation is completed by the loan providing bank and the lawyer clears all the paperwork for the next step to get the home loan. The next step is the final registration of the deal.

The loan documents are finalized by the bank lawyer and then drafted with all the necessary stamps and signatures.

Step 10 – Signing the Loan Agreement

Once the paperwork is completed, the loan applicant has to verify and do sign the home loan agreement. He/she has to submit the cheques for the initial 36 months or for the time duration both the parties agreed upon.

When this process is completed, the original property papers have to be handled to the bank. Some banks can create a video recording of the applicant handing over the property papers to the bank officials for the future-proof. This is done by the bank for security, proof and security.

Step 11 – The Loan Disbursal

Once you have signed the papers and everything has been done legally, the home loan amount will be given via cheque. However, the loan applicant has to submit some more documents to the bank, as these documents will be served as his/her personal contribution to the home property.

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