How to Apply for Housing Loan – 100% Approval Method

Housing Loan, which is also known by the name Home loan, is a loan applied by a borrower to a financial institution or a bank, before buying a house. In recent days, the rate of people who are willing to purchase new home has vastly increased. This is due to the increase in rent rate and also banks are providing easy approval of housing loan to all its customers, in reasonable rate of interest. However, before applying for a housing loan, customers has to gain knowledge in the terms and conditions of the bank that is offering housing loan. 

In this article, we are going to discuss about the steps involved in applying for a housing loan. Below are the step by step procedure for applying for a housing loan. 

Step by Step Procedure for Applying for a Housing Loan: 

Step 1:  Before applying for a loan, customers should be check for any existing loan with the bank. If so, he has to check his credit limit before applying for a loan. 

Step 2: Once you check for the credit limit, you have to fill out an application form for requesting for the home loan. In addition to the form, he or she has to submit the copies of the below proofs of identification and address.

The Documents Required are as Follows: 

  • Government Identification Proof
  • Address Proof
  • Aadhaar Card
  • Education Qualification proof
  • Age proof
  • Employment proof
  • Bank statement
  • Proof of Income
  • Pan card
  • Documents of the house, that we have finalised

Step 3: Once you submit the forms with the documents required, you will be charged for an initial amount known as the loan processing fee, which differs with each bank. Nowadays, in many banks they are negotiating this processing fee, in order to attract more and more customers to their bank. 

Step 4: Once the submission is done, the applicant’s documents are verified and the amount for which you are eligible for are decided by the bank. 

Step 5: When the applicant’s documents has been verified and the amount eligible by the applicant has been finalised by checking the repayment capacity on time, the loan will be sanctioned by the bank. 

Step 6: After all the verification has been done, bank will provide the offer letter including the below details. 

  • Sanctioned Amount
  • Rate of Interest
  • Time period of the loan
  • Mode of Repayment
  • Term and conditions on payment

Step 7: Once the applicant receives the offer letter, he or she has to sign the acceptance copy of the letter and send it back to the bank. This acceptance copy will be sent to the bank for maintaining their records. 

Step 8: After the acceptance copy reaches the bank, personnels from the bank verify the property that have been purchased. Later they provide a no objection certificate and submit other documents to the bank. 

Step 9: The loan will be disbursed, after the documents and the location has been verified and the applicant submits the acceptance letter. Once bank has been satisfied with the applicant, the registration procedure will begin for the home loan. 

Factors Considered for Providing Home Loan:

There are few factors that will be considered while you apply for a loan are follows:

  • Age: The applicant should not be more than 58 years of age, since the maximum tenure period provided is 20 years. The tenure period also depends on your age.
  • Salary: The salary considered by the bank are the base salary of the applicant and not the add ons. Depending upon the salary of the applicant, the sanctioned loan amount may vary.
  • Ongoing Loans: Bank which is going to offer a loan, also takes into account the current loans the applicant taken and EMI that he is paying every month, to settle this loan.
  • Expenses of the applicant: The bank takes into account the salary and considers the 40 percent of that amount to come under EMI payment of Home Loan. According to this, the loan amount may vary for each and every individual.

Once you start planning on purchasing a home and thinking of applying for a loan, try to do a lot of ground work, before deciding for the bank and scheme of loan. Finally decide on the tenure period by analysing the capability to pay the loan back.

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