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The Home Loan & Mortgage Loan can be described as an amount that an individual can borrow from the bank at a specific interest rate for turning their dream home into reality. The amount borrowed from a bank is further re-paid to the bank in installments i.e. EMI. Individual applying for loan needs to provide the paper of their property to bank or money lending company as security. In case the individual fails to re-fill the amount taken by them, the financial institute gets the authority over the property.

Maximum loan amount

The total amount sanctioned to the individual is not fixed. The moneylender demands around 10-20% on the purchase value of the home as a down payment. Some lenders also term it out as “one’s own contribution”. The rest of the 80-90% amount according to the value of the property is financed by the lender. The total amount which is sanctioned includes the fees of transfer, registration and stamp duty.

Documentation for loan approval ( Home Loan & Mortgage Loan )

The application to apply for loan comes along with a checklist of documents which would be required to be attached with the form. It would be including the legal documents of the property being purchased. In addition to it the bank or say financial institute would be looking forward at the individual to submit their latest slip of salary, residence proof, bank statement of last 6 months and Form no. 16.

The requirements of document generally differ from lender to lender; anyhow the basic document requirements are covered above. There are some institutes which even demands collateral security for example – a pledge of shares, national saving certificate, etc.

Procedure of sanctioning the Home Loan & Mortgage Loan

The complete procedure is divided into six steps and here is a quick look –

Filling application form – the procedure starts with filling up the loan application. The information demanded in form is nearly to be same in every form; despite of bank. Various documents are also required to be attached like proof of income, bank statement, etc. anyhow the list of documents required comes along with the form.

Personal discussion – once you are done with fulfilling the form, the bank would insist to get a face time with you. The purpose of this meeting is to generally gather information about applier.

Bank field investigation – there are thousands of people who are applying for this loan every day. The bank takes a step forward to cross check the details provided by applier as they cannot just sanction the loan without cross-checking. Sanctioning a loan consist of a lot of risk factors.

Credit appraisal – it is basically the stage where the decision gets partial about either to sanction the loan or not. The loan is only provided to the person who has good credit appraisal.

Offer letter – one the bank has cross-checked the information provided by you and is satisfied with it then they would be sending an offer letter to you with the following information – the amount of loan, the rate of interest, mode of repayment, etc.

Property and paper – once all these steps have been completed smoothly; the concern of bank shifts to the property that the applier is willing to buy. Once the applier has finalized property; they need to hand over the original papers of property to bank till they repay the loan amount.