Home loans help you realize your dreams of buying the house
you have always wanted and also help save tax. A home loan is an essential part
of any home buying endeavour. The key to getting your home loan in a smooth way
is being familiar with the entire home loan process.
Beginning the home loan process
The process of getting a home loan starts with a formal
application for the loan. The application form requires certain basic
information about you which includes your personal, residential, income, employment,
educational details, and details about the property, estimated costs and
current means of financing the property. The requirements often vary bank to
bank.
The application form must be supported with valid documents
to substantiate the facts. Generally the banks ask to submit the following
documents.
- Income proof
- Age proof
- Identity proof
- Address proof
- Employment details
- Proof of educational qualifications
- Details about the property if finalized
- Bank statements
The purpose of the entire exercise is to ascertain the
suitability of the applicant for a home loan. The income documents and bank
statements provide vital clues to the bank regarding your financial health.
The concept of processing fee
An important thing to note about home loans is the processing
fee. Banks charge a processing fee for every home loan application. This fee is
non refundable. The processing fee also varies from bank to bank and is
generally from 0.25% to 0.50% of the loan amount. This fee is used by the bank
to start and maintain the home loan process including completing the various
formalities during the entire period.
Although there are a few points that should always be kept
in mind
Additional charges to be kept in mind
When you are applying for a home loan, you need to be educated
about the various charges that the lenders add to the current scheme. The
additional charges fall under the amount sanctioned in your name and not on the
amount you take home.
Read the fine print of the agreement
Even if the home loan agreement is a bulky document, read it
carefully.
Never Leave a Doubt
Applying for a home loan might seem easy but it comes with
its own set of complications. So, never leave a doubt in your head which may
lead to complications later on.
