How to get your home loan sanctioned easily

Buying a home is a dream of many. It’s a big decision and can be stressful if done without thorough research and careful financial planning. Getting your home loan sanctioned is one of the crucial steps in the process and knowing what to expect during the same can reduce your stress.

To be able to shortlist properties, you first need to figure out how much loan you can afford and what are the different factors affecting your loan application. Banks approve any loan application after verifying the applicant’s background, required documents, and CIBIL score. Once your loan application is approved, the bank issue a home loan sanction letter which includes details regarding the loan amount, tenure and interest rate and other relevant information regarding the loan.

Steps Involved In Home Loan Sanctioning Process

a. Getting A Loan Offer

1. Fill the Loan Application Form

Once you have decided which bank or lender you prefer, you have to fill out an online application. You will be asked about your personal information and additional details about your employment, income, loan amount, and tenure. If you are applying with a co-applicant, submit the same set of documents of the co-applicant. Ensure that you review your application thoroughly before submitting it. You will also be have to pay a processing fees, which varies from lender to lender; some may charge a fixed fees while others charge between the range of 0.25% to 1%.

Documents required for home loan application:

• Proof of identity (Aadhar card, passport, PAN card)
• Proof of address (utility bills, rental agreement)
• Income proof (salary slips, income tax returns)
• Bank statements for the last six months
• Employment proof (offer letter, appointment letter)
• Passport-sized photographs
• Property documents (in case you have already finalized the property)

2. Check Loan Offer

Once you have filled those details, you have will get a custom offer with the maximum loam amount and detailed breakdown of your EMIs, tenure and interest rate. This is called a provisional approval or a pre-approved home loan. It allows an applicant to get a Home Loan sanctioned even before they finalise the property. However, remember that the terms of loan may change slightly during the disbursal. When you know the maximum loan amount you are eligible for, it makes house hunting easier.

3. Loan Sanction Letter

Once the lender has reviewed all your documents, they will initiate the approval process. You will receive your Home Loan Sanction Letter specifying all the details of your loan.

• Sanctioned loan amount
• Tenure
• Interest rate
• EMI details
• Terms and conditions of the loan

If you agree with the terms of the loan, you have to send back the signed copy to the lender.

Note: Remember that banks wll only approve of maximum of 80-90% of the property value. You will have to pay at least 10-20% of the total property cost from your pocket.

b. The Approval Process

By this stage you would have finalized the property you are looking to buy. Before approving your home loan, banks check whether the property is in any litigation and is in good structural condition. Below are the steps involved in this process:

1. Property Valuation:

One of the critical steps in the loan approval process is the valuation of the property. Bank/ Lender appoints valuers to assess the property’s worth, to evaluate the risks associated with the loan.

2. Legal Check:

Lenders conduct a legal check on the property to ascertain its legality and ensure there are no pending legal issues. This involves examining property documents, checking for encumbrances (a claim against proper impacting transfer of ownership), and confirming the property’s ownership.

c. Loan Disbursal

The final stage in your loan sanction process is loan disbursal. This is a stage where you decide the date of disbursement, date of EMI and mode of disbursement based on their convenience.

1. Loan Agreement

Once the property valuation and legal checks are successful, you have to sign the agreement of the home loan. You will also have to submit post-dated cheques for the initial 36 months or the duration mutually agreed with the bank.

2. Property Registration:

Before the loan amount is disbursed, the property must be registered in the borrower’s name. This involves paying stamp duty and registration fees as per the prevailing state laws.

3. Loan Disbursement:

Once your loan is approved, the lender will give you the money in stages. Each part of the money, known as tranches, is released based on completing all the required paperwork and following the terms in your loan agreement.

Owning a home is a significant milestone for many, which is made accessible through home loans. However, the journey from applying for a home loan to its sanctioning involves navigating through a series of steps and processes. Ensure that you follow the steps mentioned above to get your loan application sanctioned smoothly.