You’ve searched for your dream home. Now you’re looking for a Home Loan? If you’re wondering what happens after your Home Loan is approved, this is your quick guide to the post-application process.
First things first, property assessment! The property that you want to buy, as well as any property that you provide as collateral security will be inspected by a technical officer. If it is an under-construction property, the stage of construction and quality of construction is noted. If it is a completed property, the age of the property, internal and external maintenance, and development of the surrounding area will be noted by the officer.
Scrutiny of documents
The documents pertaining to the property will also be scrutinized by a lawyer. Generally, only the original documents for the property are accepted by the bank. The No Objection Certificates (NOC) need to be submitted to the bank.
You need to go to the sub registrar office for the registration of your property. You also need to pay your stamp duty and registration charges. After this process is complete, you will receive a copy of the Sale Deed and another copy will go to the bank.
Pay Your Part
The bank will ask for proof of your contribution to the loan. This is your down payment. You might need to give your bank statement, with a cheque or net banking details of transferring the money to the builder.
Disbursal of Home Loan
On your acceptance of the loan offer extended by your lender, the assessment is done and documents are scrutinized. The property also gets registered in your name. Once this is completed, you will need to submit the final processing fee to your lender by cheque.
When the processing fee is received by your lender, a cheque for the approved loan amount is prepared and given to you. Your Home Loan repayment schedule will begin one month after the loan is disbursed.
Additional Reading: How A Home Loan EMI Calculator Works
If you purchase an under construction apartment, your bank will release the funds in stages. This will be based on the construction progress. So, until the construction is totally completed, you needn’t pay EMIs for the whole Loan amount. Sounds fair? For a completed apartment or house, the funding will be released in one shot.
ECS Set Up
The Electronic Clearing Service (ECS) or the standing instructions need to be set up for your loan. Here, you need to sign ECS forms so that the EMI gets auto-debited every month. Earlier, this might not have been mandatory. Now, banks are making it mandatory to submit ECS forms for all Loans. This way, you don’t have to worry about forgetting the due date of your EMI.
Get Demand Letters
As and when the builder completes the construction of the house or apartment, funds will be released by the bank. You need to get a demand letter from the builder and give it to the bank whenever the funds need to be released. The builder needs to provide a receipt for the same. This receipt should be handed over to your bank.
Additional Reading: All About Home Loan Insurance
Getting a Home Loan is simple, really. If you’re ready to get one step closer to your dream home, why don’t you browse our offers on Home Loans?