Many of us dream of being house owners. It is a way to ensure our and our family’s financial stability for a lifetime; the sort that does not come from staying in a rental house. But it is a difficult procedure to purchase a home. If it is years of savings to be made as down payment, or choosing the right spot to invest in; it is elaborate to purchase a home. And because investing in property takes up a massive chunk of savings, most of us depend on home loans.
Yeah, for tenures that last up to 30 years, you can take out a home loan and pay it off in basic equal monthly installments (EMIs). Let’s explain to you how the home loan process works.
Complete the application process
The method of taking out a home loan starts with an application form being filled out by the creditor. The application form is the most common document in which you must include personal information about yourself, such as your name, address, profession, phone number, monthly and annual income, and information about education. Details on the property you choose to buy, the total expense of the property, and the down payment you can afford must also be included.
Notice that with your application form, you must supply your ID proof, address proof, income certificates, ITR of the last three years, bank statements, etc.
Verifying your documents
The bank verifies the documentation issued by you after you send your documents. This is an integral part of the home loan process and it can take up to 2 days for banks to check the papers. You will also be asked to attend the bank at this period and to pose for a face-to-face interview. This is the way banks guarantee that you are willing to repay the loan within the tenure specified. You can visit your nearest PNB Housing branch and ask them what are the documents required for home loan.
Check your background
The bank also conducts an impartial background check of the credentials of the applicant, in addition to checking your records. To this end, the bank can carry out an investigation on the basis of the details you offer in the application form, including your past and current residential addresses, your place of employment, your employer’s qualifications, contact information for the office, etc.
Processing fee payment
It starts the housing loan process after the NBFC is convinced about the repayment potential. As such, a payment fee, which is a sum collected by the NBFC to handle the loan application, must be paid. Banks usually bill between 0.25 percent and 0.50 percent of the principal loan sum + GST as transaction fees available everywhere. However, this does not actually mean that there is approval for your loan.
Approval of your loan
By far, this is the most important step in the whole chain of home loans; the bank now determines whether to accept or refuse the loan. You must truthfully supply all the mentioned paperwork to ensure that your loan is not denied. This is also the point in which the overall loan balance as accepted by the bank will be calculated by the borrower, as well as the interest rate paid relative to the different tenures. By giving you an official letter of sanctions, the bank communicates this information to you.