A home loan can be availed by for any of the following purposes:

• To purchase a house either ready-built, under construction or from a second owner.

• For self-construction of a property on a plot of land.

• To finance the purchase of a plot of land allotted by a society / development authority.

• For renovation or improvement of an existing property in India.

• Applying for the loan: After you have selected your lender, you have to fill in the application form, wherein the lender requires complete information about your financial assets & liabilities; other personal & professional details together with the property details & its costs.

• Documentation & Verification Process: You are required to submit the necessary documents to the bank, which will be verified together with the details in the application

• Credit & default check: Bank checks out the borrower’s loan eligibility (through repayment capacity) & the amount of loan is confirmed. The borrower’s repayment capacity is reached, which is based on the income, salary, age, experience & nature of business etc. Bank also checks credit history through the Cibil Score, which plays a critical role in deciding & approving your loan application. Low credit score implies that the bank upfront rejects your application on the basis of earlier credit defaults; on the other hand high credit score gives a green signal to your applicati

• Bank sanctions Loan & Offer letter to the borrower: After the credit appraisal of the borrower bank decides the final amount & sanctions the loan, the bank further sends an offer letter to the borrower, which constitutes the details like rate of interest, loan tenure & repayment options etc.

• Acceptance Copy to the Bank: The borrower needs to send an acceptance copy to the bank after the borrower agrees with the terms & conditions in the offer letter.

• Bank checks the legal documents: The bank further asks the legal documents of property from the borrower to check its authenticity, so as to keep them as a security for the loan amount given. The next step involved is the valuation of the property by the bank which determines the loan amount sanctioned by the bank.

• Signing of agreement & the loan disbursal: The borrower signs the loan agreement & the bank disburses the loan amount.

Following documents are required by financial institutions to process the loan application:

• Income

• Age Proof

• Address Proof

• Income Proof of the applicant & co-applicant

• Last 6 months bank A/C statement

• Passport size photograph of the applicant & co-applicant