Home Loan Disbursement – A Step By Step Complete Guide
Home loan disbursement refers to the process of getting loan money disbursed from the bank to buy a home. There are various processes involved in this complete disbursal of money. Various documentation is required with proper down payment and other things. Let us discuss the procedure of home loan disbursement in this article in detail.
The home loan can be disbursed online and offline. There could be complete disbursal and partial disbursal of home loans from the bank, and it depends upon various factors.
Home Loan Disbursement Process
Table of Contents
1. Fill the Home Loan Application Form
The procedure of getting a home loan always starts with filling up a home loan form with all adequate details. You can fill up this application form offline and online as well. You will need to fill in the correct details regarding your income, liabilities, property, education, previous loans, etc. Your application will get accepted or rejected based on this information, so you have to be very much honest while filling up these important applications. If in case the information provided by you is inaccurate, you might not get your home loan approved by the home loan department of the bank.
You will also need to attach the following required documents together with the form
Identity Proof – You can submit your identity proof like PAN Card, Aadhaar Card, Passport, Driving License, etc.
Address Proof – You can submit your Address proof like your Aadhaar Card, Bank Statement, Electricity Bill, Rental Agreement Copy, Passport, Driving License, etc.
Age Proof – You can submit your Age proof like your Birth Certificate, 10thCertificate, Aadhaar Card, PAN Card, Passport, etc.
Proof of Education Qualification – You can submit your Education Qualification proof like your Degree Certificate, Report Card, College Leaving Certificate Etc.
Income Proof – You can submit your income proof like salary statement, salary slips, ITR, etc.
If Not Salaried Then Proof of Business – You can submit your business proof like Balance Sheet, Profit & Loss Statements, Business License, Proof of Business Address, etc.
Documents of the Property For which You need Home Loan – You will need to submit various property-related documents like approved copy of building plan, NOC from society/builder, estimated cost of house construction, etc.
Apart from all the documents mentioned above, you may need additional documents depending upon the bank you are opting for a home loan disbursement.
*All the documents provided should be self-attested. *
2. Payment of Home Loan Processing Fees
Once you are done with submitting the home loan application form you will need to pay home loan processing fees to the lender. Home loan processing fees vary from bank to bank or lender to lender. The processing fee is not refundable and ranges between 0.25% to 0.5% of the applied home loan amount. There are various lenders who completely wave off their home loan processing fees. Generally, these home loan processing fees are levied to commence the home loan process and to maintain the applicant’s home loan account. Some lenders have a fixed amount as processing fees as well as some lenders have some specific amount of cap on home loan processing fees.
3. Waiting Period For Documentation Process and Verification
While adopting for a home loan you have to be patient because there are various processes involved like verification and sanctioning of your home loan from the authority. Once you are done with submitting your home loan application together with processing fees you will need to wait till the lender guide you to the next step. It is advisable to be in contact with the lender to know about your home loan application status. You can also go and meet your lender to have clear communication if in case any of the document is missing or you are lacking eligibility for the applied home loan amount. You can explain and provide all the essential documents if you come across such kind of hurdle in between.
For verification purposes, bank representatives may come and visit your home or office place to validate the information provided by you in the application. The lender also may check your CIBIL score and credit reports to validate your information. To keep the procedure smooth and quick it is advisable to submit only authenticated information to the lender.
4. Collect Home Loan Sanction Letter
After verification of all your documents and your personal information, the lender will proceed further to provide you a home loan sanction letter. The home loan sanction letter usually contains the following mentioned things that you need to verify from your side.
- Sanctioned loan amount
- The applicable rate of interest
- Type of interest rate – Fixed or Variable
- Loan Tenure
- Mode of Repayment
- Special Scheme (if applicable)
- Terms and Conditions of your home loan
- Policies of your home loan
- Get Home Loan Tax Benefits
After receiving the sanction letter, you will need to submit the acceptance copy to the lender if you are Ok with the loan amount and other terms and conditions as mentioned in the sanction letter. Usually, the acceptance copy is the duplicate copy of the sanction letter that the lender needs to keep for their records.
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5. Property Verification
The property against which you are going to get this loan is a crucial thing for lenders. So, before your home loan disbursement, the lender will verify your property and go with all legal checks to authenticate your property. For that, you will need to submit original copies of the no-objection certificate, title deed, encumbrance certificate, and other documents that your lender asks for. This legal property check is beneficial for the lender as well as for you. As it will thoroughly inspect the property against any kind of present and previous property dispute and will also check if the propertys’ title is clear or not. In this process, there will be a technical evaluation of a property by a bank representative.
If the property is under construction, they will scrutinize the property by analyzing the stage of the construction, quality of construction, and progress of the construction, etc. And if the property is of resale then the bank will evaluate its age, type of ownership, quality of construction, maintenance, locality, and legal clearances.
6. Home Loan Disbursal
If you cross all the above-mentioned steps of home loan disbursal successfully then you will get a green signal from the lender. And you will get the home loan amount disbursed in the form of a cheque as per the mutually agreed terms and conditions.
Other Important Terms About Home Loan Disbursement
In the case of ready-to-move-in or resale properties, the loan disbursement is full and not partial like in the under-construction properties. This implies that the lender gives the full disbursed amount via cheque to the borrower.
When the property type you are applying for is under construction, the loan disbursement is not done in full, instead, it is done in parts and called partial disbursement.
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