A Home Loan is one of the best ways to purchase a house or a plot of land, or to make repairs to an existing house. With increased competition among banks, availing a Home Loan has become easier than before.
Here is the procedure of how to get a Home Loan.
Typical Home Loan application process:
The first step of how to take a Home Loan is to check your eligibility. The eligibility for the Home Loan depends upon your repayment capacity. Repayment capacity is determined based on your monthly income, monthly expenses, other liabilities etc. The basic requirement for a bank is that you should be able to pay your loan instalments on time.
Banks also consider the age of the applicant and the family status. Someone with many dependents may not be able to meet the costs of the loan every month. As compared to that, a younger applicant without dependents can spend a greater proportion of monthly income on repaying the Home Loan.
After considering your eligibility, the bank considers the value of the property which needs to be financed. Typically, Home Loans are secured loans. This means the property papers will be with the bank till the loan is repaid. The applicant can enjoy the property, but in case of default, the bank is allowed to dispose off the property to meet proceeds. Banks usually have a pre-decided loan to property value, which means the portion of the property that they will fund. For example, if the loan to property value is 75%, the bank will fund 75% of the property value. Once these factors are decided, the bank disburses the Home Loan amount.
Read more about fixed or floating interest rates for Home Loans.
How to apply for a Home Loan:
The application process for a Home Loan is simple. The first step is to find out the bank where you would like to apply for a Home Loan. Different banks have different interest rates for Home Loans. By using aggregator websites, it is possible to compare Home Loan interest rates online and find out a few banks you can apply to. It is always best to have more than one bank you can apply to so that in case one bank doesn’t approve, you have another option to fall back on.
Each bank has its own loan application process. Applications can be done online through the bank’s website, or offline in the bank branch. Both cases require a form to be filled up and the relevant documents to be attached. Some of the common supporting documents required to get a Home Loan are:
- Residence proof
- Identity proof
- Income Tax returns for the past 3 years
- 6 months bank statements
- Any other collateral security
- Property registration papers
Based on your documents, the bank decides whether you are eligible for a Home Loan, and if you are, the monthly installments. Once it approves your application, the funds are disbursed to your account.
The procedure of how to take Home Loan from bank is very simple. Banks like HDFC Bank offer a convenient online application procedure for Home Loans which make it easy to apply and get accepted for a Home Loan.
To apply for an HDFC Bank Home Loan, click here to get started.
* Terms & conditions apply. Loan disbursal at sole discretion of HDFC Bank Ltd.
