The journey begins: A step-by-step guide to applying for a home loan

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The home loan application process can become daunting and overwhelming if you are not well-prepared. In this step-by-step guide, we will walk our readers through the home loan application process. Applicants will discover that certain steps and details can vary from lender to lender. However, the home loan application process, by and large, is the same for all lenders. Let’s now delve into some of the steps involved in applying for a home loan.1. Choose your lender
There is no dearth of lenders in the market to choose from. However, not every lender will be willing to offer you the best loan deal. Therefore, thorough research is crucial. Talk to as many lenders as you can. See what each lender is offering you. Compare home loan offers using a home loan EMI calculator, and in the end, choose to go with the lender who has extended to you the most lucrative deal.

2. Apply for a loan
The next thing you must take is to apply for a loan. Most lenders offer borrowers the option of applying for a home loan online. However, if the online option doesn’t work for you, you can apply for a loan the traditional way, that is, by visiting your lender’s office. Please keep in mind that you will be required to attach a few documents along with your application, such as KYC, age, address, and income proof documents, educational marksheets, property documents, etc. Please keep all these documents ready to experience a hassle-free loan application process.

home loan EMI calculatorSpotlight Wire

3. Pay the processing fee
While submitting your home loan application form, the system will prompt you to pay the home loan processing fee. The home loan processing fee is the charge that lenders charge to maintain your loan account. Home loan borrowers continually receive home loan statements and the home loan processing fee covers the costs associated with sending these statements as well as taking care of other expenses related to your account. Furthermore, your application will be handled by a dedicated agent and their commission is also covered by the home loan processing fee paid by the borrower. This fee typically ranges from 0.25% and 0.50% of the home loan amount. However, applicants can negotiate with their lender to reduce the home loan processing fee. If you wish to have the home loan processing fee completely waived , consider applying for a loan during the festive season.

4. Wait to hear from your lender’s representative
If the documentation you’ve provided is complete and accurate, you will typically receive a response to your loan application within 24 to 72 hours. Most lenders take around 48 hours to make a decision on a loan application.

5. Wait for document verification
Millions of people apply for a home loan each year. Unfortunately, not everyone pays their home loan EMIs on time. Therefore, lenders have become extra cautious about whom they lend money to. They carefully scrutinise each application to assess an applicant’s eligibility against their established criteria, and approve a loan only when they are thoroughly satisfied. Even after they have granted approval, they do not proceed with the actual loan sanction and disbursement process until they have verified every single document provided by the borrower. This is the reason why home loan applicants are strongly advised to never provide false information in their loan applications.

Loan VerificationSpotlight Wire

6. Wait for your loan sanction/offer letter
If your lender is thoroughly satisfied with all the information provided in your loan application, they will extend a loan offer to you. This loan offer will include details of the loan amount they are willing to provide, the rate of interest that they will charge, the loan tenure over which you must pay off the loan, the offered interest rate regime, etc. If you are happy with the loan agreement, you can send a signed copy of it to your lender. However, if you are not content with the terms and conditions mentioned in the loan agreement, you should express your expectations and negotiate with your lender.7. Your lender will now verify all the property documents
After you have sent a signed copy of the loan offer to your lender, they will proceed to verify the property documents and the property that you wish to purchase. You will be required to submit all the original property documents, and these documents will remain in possession of your lender throughout the loan tenor. Your lender will meticulously review all these documents. Additionally, they will send an expert to conduct a technical verification of the property that you intend to buy. Lenders take these measures just to ensure they are not assisting you in acquiring a property that may run into legal or technical issues in the future.8. Sign the loan agreement and wait for loan approval
If your lender is satisfied with all the information you have provided and has verified the safety of the property that you intend to purchase with the loan, they will present you with the final loan agreement. You must visit your lender’s nearest office to sign this loan agreement, as it is the only step in the process that cannot be completed online. Home loan applicants must carefully read the entire agreement and ensure they have a clear understanding of every point mentioned in it before signing. If anything raises concerns or if any point is unclear, seek clarification. If necessary, consider hiring a home loan legal expert, but do not sign anything until and unless you fully comprehend each and everything outlined in your loan agreement.

Once you have signed the final loan agreement, your lender will sanction and disburse the final loan amount into your account, allowing you to pay the builder and complete your home purchase.

Disclaimer – The above content is non-editorial, and TIL hereby disclaims any and all warranties, expressed or implied, relating to it, and does not guarantee, vouch for or necessarily endorse any of the content.

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