All You Need to Know About Applying for a Home Loan

Availing a Home Loan is the best way to fund your dream of buying and owning a home. You don’t have to exhaust all your savings, you don’t have to depend on your relatives for finance, and you don’t have to worry about repaying it off in one go.

However, applying for a Home Loan takes a lot of research and work from the borrower’s end. Even if you have finalized a few lending options, you need to consider various factors to make your a Home Loan application process a smooth journey.

If you’re thinking of applying for housing finance, here are some important questions you should ask yourself first:

1. Am I Eligible to Get a Home Loan?

The first thing you need to check is whether you are eligible to get a Home Loan or not. The bank, NBFC or other lending institution will assess your eligibility once you have submitted your personal and financial information. Here are some important factors that lenders consider for checking your eligibility to approve the loan request:

• Age  
• Address (with Pin Code)  
• Credit Score and Credit History  
• Income  
• Type of employment and job continuity (for salaried employees)  
• Nature of business and continuity (for self-employed professionals and business owners)  
• Type of property being purchased

• Other savings and assets including Fixed Deposit, Mutual Funds, Provident Funds, details of property owned (if any)

Based on these criteria, your home loan request is approved or rejected and the amount is sanctioned (if approved).

2. What is My CIBIL Score? Is My Credit History Clean?

Your credit score and credit history play an important role when it comes to loan approval. Your credit report includes your personal details (such as name, date of birth, residential address, and PAN), a record of all your credit accounts, and summary of overdue accounts (if any) linked to your name.

Based on your repayment record, your credit score is determined by the Credit Bureaus. Most of the lenders seek a credit score of 650 and above to sanction a Home Loan.

Make sure your credit record is clean of any defaults and delayed payments. If you find any error in the information in your report, get it rectified immediately. It’s good to get any credit issues resolved before submitting your Home Loan application.

3.  Is My Property Eligible for a Home Loan?

A technical officer from the lender’s side will visit and evaluate the property you are purchasing and will also inspect the property documents provided by you. After verification by the technical officer, the lawyer will scrutinize all the documents pertaining to the concerned property. Only when the title, legal and valuations of the property meet the lender’s norms, you will be able to get the loan approval by the lender.

Recently, the Indian government has made it mandatory for all the projects to be registered under Real Estate (Regulation and Development) Act 2016 (RERA). If the property that you want to buy is not registered under your State RERA, the banks will not extend a Home Loan to you.

After you have answers to all the questions mentioned above, you are ready to apply for a Home Loan. For doing so, make sure you are aware of the following:

1. Documentation

To apply for a Home Loan, you need to submit an application along with the documents listed below:

   ID Proof/ Age Proof (Any one of the below-mentioned documents):

• Passport  
• Aadhar Card  
• Voter ID  
• Driving License  
• PAN Card

   Address Proof (Any one of the below -mentioned documents):

• Registered Rent Agreement + Ownership Proof of the Owner  
• Aadhar Card  
• Passport  
• Driving License  
• Lease

   Income Related Documents:

• Salary slips of last 6 months (for salaried employees)

• Complete financials including Income Tax Returns, Profit & Loss statements, Balance Sheet and Tax Reports of last 3 years (for self-employed professionals and business owners)

   Other Documents:

• Loan Application signed by all the applicants and co-applicants  
• Passport size photographs (signed across)  
• Property documents  
• Complete chain of Title documents

• Allotment letter, payment receipts, builder-buyer agreement, possession certificate, occupancy certificate (if applicable), conveyance deed, sale deed, and approved sanction plan (if applicable)

* All documents need to be self-attested by the documents’ owner

2. Interest Rates and Loan Tenure

There are several factors that help in deciding which loan is best including – loan amount, tenure, and interest rates. This is the best time to get a Home Loan as interest rates have reduced over the last 2 years and the interest rates are starting from as low as 8.35%, making Home Loans cheap and affordable in India. The government is also intruding affordable housing schemes for the citizens of India such as Pradhan Mantri Awas Yojana The Mortgage Specialists of MyMoneyMantra with more than 30 years of experience in the field can help you get access to low-interest Home Loans with favorable terms and conditions.

3. Processing Charges and Other Associated Fees

You might have got a Home Loan with the lowest available interest rate, but when the lender adds up all the associated charges, the same loan can become a way too expensive for you. Make sure you ask your lender about all the associated costs (such as application fees, processing fees, legal scrutiny charges, and booking fees) in advance so that it doesn’t come as a surprise to you and you can be financially prepared for the same.

4. Be Prepared with Your Own Contribution for Down

Payment Margin

You need to arrange for down payment before availing a Home Loan because lending institutions may not finance the entire value for the property you want to purchase. Most of the banks offer 75-90% LTV (Loan to Value) to their customers depending on their creditworthiness and other factors like income, the value of the property, credit history, etc.

5. Home Loan Disbursal Process

When you are sure which lender and loan option you want and pass the eligibility criteria for loan approval, the bank provides a Loan Sanction Letter and Agreement which will mention all terms and conditions pertaining to the Home Loan. Once you accept the agreement, then the document processing will start. You will need to pay the Processing Fees then (as specified by the lender). The entire process will take 3-4 days. After all the formalities are done, a cheque is duly prepared in favor of the respective seller/ builder for the approved loan amount. The repayment schedule for your Home Loan will begin typically 30-45 days after the disbursal of loan.

With the information mentioned above, taking a Home Loan is much more simple than you would have ever thought. Still, if you face any challenges in getting the perfect Home Loans, talk to the Mortgage Specialists of MyMoneyMantra and get access to the best available offers from across our 70+ lending partners.

To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 70+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.