A home loan is the best way to fund the purchase of your home, a plot of land, to renovate your house, and so on.
The eligibility for a home loan depends on your repayment capacity. Your repayment capability is determined based on your monthly income, monthly expenses, other liabilities etc. The basic qualification for the bank will be that you should be able to pay your EMIs on time. The other factors considered are age of the applicant, education, monthly income, family status, and so on. If you have many dependents, then you may not be able to pay your home loan easily. A person with fewer dependents can allocate a greater amount towards repaying the home loan.
After verifying your eligibility, the bank will evaluate the value of the property for which you are going to take the loan. Until the loan is repaid, the property papers will be with the bank. You can enjoy the benefits of the home loan, but in case of default, the bank can dispose of the property to meet the proceeds. Banks generally have a predetermined loan to property value. This implies the portion of the property that they will finance. For example, if the loan to property value is 75%, the bank will give up to 75% of the property value as a loan. Once these factors are determined, the bank disburses the Home Loan amount.
Step-by-Step Guide to Home Loan Application Process
The steps to complete the home loan process are as follows:
- Complete the loan application form & attach the documents
- Pay the processing fee
- Discuss with the bank
- Evaluate the documents
- The approval process
- Processing the offer letter
- Processing The Property Papers and a legal check post that
- Processing a technical check and estimating the site post that
- The final loan deal
- Sign the agreement
- The Loan Disbursal
Also Read : What is the Process of Applying for Home Loan?