You might need to take a home loan for buying out a new house or land for your new house, or even for renovating or expanding your existing house. However, there could be a number of complexities involved while applying for or even after getting approved for the same. Let us go through the important aspects of home loan that you need to know to easily go through the whole process starting from checking your eligibility for getting a home loan to the final repayment. Let us get started and prepare you for the same.
Before deciding the amount of money you would like to spend on your home of dreams, it is really important to know the amount of money that you are eligible for. The banks decide this amount ranging on a number of factors such as your income, age, existing assets and debts, credit history, and a few more such aspects. However, different banks/lenders might offer you a slightly different loan amount but it would not be more than 75% – 85% of the value of your home/land, so be prepared with the remaining 15% – 25% of the total amount to retrieve your loan and to pay as the down payment.
What Documents would you require?
After filling up an online or manual application form, you would be asked to submit a number of documents which would be then inspected by the lender to let you know the expected amount to be received by you and the terms and conditions associated with the same. After complete inspection by the lender/bank and complete satisfaction, which can take up to a few weeks, the lender will issue a sanction letter which would contain the details of the approved loan? Type of documents that you should be ready with:
- Government Approved Photo Identity Proof
- Passport Size Photographs
- Proof of your Age
- Bank Statement of your last 6 months
- Property Deed
Along with the above-mentioned documents different lenders might ask for different documents.
What happens once the Loan is sanctioned?
Once the loan has been sanctioned, you would be required to submit all the official property documents which are meant to remain with the lender till the complete repayment of the loan. The submitted documents would be verified and scrutinized by the lender’s legal team.
Do you need Collateral?
Most of the banks/lenders would typically ask you for collateral in the form of existing assets, bank guarantees, insurance policies, etc. Such documents would be used by the bank to retrieve the loan amount in case of your inability to pay back the loan amount.
One of the best things about home loans is that it allows you to have a few financial benefits with might not be applicable otherwise. However, before going ahead with any of the loan providing banks/lenders it is really important to go through each and every applicable term and condition before finalization of the loan agency for your new dream home.