How to Get a Home Loan?

Home loans are a great way to finance your new house. You can take a home loan to buy a plot, pre-owned, or even an under-construction house. 

Depending on your eligibility and creditworthiness, you can get up to 90% of the price as a loan. The complete process of getting a home loan from a bank is covered in detail in this post.

Step-by-step Process to Get a Home Loan

Want to know how to get a home loan from a bank easily? Follow the steps mentioned below -

Step 1: Eligibility Check

Before you apply for any kind of loan, including home loans, you need to verify your eligibility. The specific criteria may vary depending on the lender you choose. 

Most lenders allow you to check your eligibility online. For that, visit your lender’s website and enter your mobile number and the required details. You will be told if you are eligible for a home loan.

Step 2: Application Form

Once you are sure of your eligibility, you can proceed to filling out the application form. You can complete this step both online and offline. 

For offline applications, visit your lender’s nearest branch and request an application form. For online applications, visit your lender’s website and click on the ‘Apply Now’ button. Fill in the application and click on ‘Proceed’.

To get a home loan from a bank or NBFC, you need to provide basic details such as your home address, yearly income, educational background, employment history, and other personal information to complete the application.

Step 3: Document Submission

Documentation is a major step in loan application. Again, you can submit the necessary documents both online and offline. 

In case of an online application, you can upload scanned copies of the required documents. For offline applications, you can submit photocopies of the documents with your application form.

The required paperwork includes bank statements, property records, identification and address verification, and proof of income. Even though the exact documents might vary depending on your lender, here are some of the major documents that can work -

• Proof of Identity - Aadhaar card, PAN card, Passport, or Driving license

• Address Proof - Aadhaar card, Passport, Voter ID or electricity bills

• Income Proof - Salary slips, Bank statements, Form 16, or Income tax returns

• Property Documents - Sale Deed, NOC from the builder, Agreement to sell, and Property tax receipts

• The previous 6 months' bank statements

Step 4: Document Verification

In this step, you will actually find out if you will get a loan or not. Your lender can take anywhere between 24 hours to a few working dats to verify your documents and get back to you. 

Lenders generally verify the following information -

• Residential address

• Employment details

• Employer credentials

• Residence contact number

• Workplace contact number

If your documents are unsatisfactory, you might need to submit more documents or your application might get rejected. 

Step 5: Loan Approval

Once your documents are verified, the lender will start the approval process. The lender thoroughly reviews the application based on the following criteria -

• The applicant's age and qualifications

• Information about the applicant's employment and business

• Information about the applicant's income

• The applicant’s capacity to pay back the loan with the determined interest

Once approved, the lender will sanction the loan amount and provide a Sanction Letter. The sanction letter includes information like loan amount, interest rate, and other relevant details.

Step 6: Agreement Signing

In this step, the deal gets finalised. Once all technical checks have been completed and the lender is satisfied with the property used as collateral for the loan, both parties will sign the documents.

Make sure you read the documents and loan agreement carefully before signing it. If you have any extra queries, now is the time to clear them with your lender. 

Step 7: Loan Disbursal

This can happen in parts or in whole, based on your requirements and the lender’s rules. The bank or NBFC pays the owner or builder directly in most cases. 

Post disbursal of the loan amount, you just have to pay the EMIs as planned over the chosen tenure.

Points to Remember Before Applying for a Home Loan

Home loans are long-tenure loans and often involve huge funds. Thus, carefully checking everything before applying is crucial. Here are a few important things to keep in mind before you search for ‘how to get a home loan easily’ -

• To lessen the likelihood of being turned down, make sure your eligibility corresponds with the lenders' requirements.

• The chosen property’s profile must meet the lending parameters and the lender's risk assessment.

• Before choosing your tenure, carefully consider your options as this will directly affect your EMIs and monthly budget.

Conclusion

Home loans are a great way for people to own the house of their dreams. Home loans generally work in this way -

• The owner or builder receives direct payment from the bank or NBFC

• The borrower pays off the loan by making monthly payments during the chosen tenure

• The lender has ownership of the property as collateral through the tenure of the loan

• Once the loan is paid off, the ownership is transferred back to you

• The lender can legally sell or auction your property if you falter on your payments

Checking the actual EMI amount by using a home loan calculator before you apply for a loan can help in planning. If you are not sure where to take a home loan from, here are the top banks and the interest rates they offer for home loans.

You can also apply for a home loan through the Moneyview digital lending app and get loans starting from 8.50% per annum. To know more, visit our website or download the Moneyview app.