While applying with any major financial institution for a home loan, following points have to be kept in mind:
- Eligibility: This will depend on total income, any assets, liabilities, certainty of income and any spousal income. This is to ensure that you have the ability to pay back the loan on time. Once banks establish that you’re eligible, the process will begin.
- Amount to Borrow: Ideally, a bank offers 80-90% of the project price and balance has to be paid by the customer himself. However, one should try to pay as much from one’s own pocket as possible to reduce the interest outgo on a higher loan amount.
- Co-applicant: Most banks would ask for a co-applicant to ensure that EMIs are paid regularly in the event of main applicant’s inability to do so due to any reason. Any family member can be the co-applicant.
- Documents: The paperwork would require various documents like ID proof, income proof, latest salary slip, income tax returns, last 6 months bank statements and the likes. In some cases, one needs to submit collateral security as well like any mutual fund units, life insurance policies, bank deposits, share units and other investments.
- Loan Sanction and Disbursement: Once bank is satisfied with the documentary proof, it would issue a sanction letter stating the terms of the loan including the loan amount, interest, term etc. After the bank conducts its own technical, legal and valuation process, it will disburse the loan to you.
- Interest Rate Options: You can either go for a fixed rate of interest or a flexible as per your priorities. Both have their plus and minus and you can decide after studying them carefully.
It isn’t difficult to get a home loan these days if you satisfy the qualifying criteria and all the paperwork is in order. Contact your bank today for a detailed discussion!