At times, getting a home loan to buy a new property could be a daunting task. To make the process easier, we have compiled a comprehensive guide to make the journey of buying a home completely hassle-free.
Home Loans for New Borrowers:
If you have been planning to buy a house for a while now, this is the most suitable time for its purchase. Even though interest rates are increasing, the rise could be steeper in the near future. Therefore, all new home aspirants are advised not to wait. Now, in case you’d like to opt for a home loan to acquire your dream home, the best thing to do at this time would be to undertake a teaser loan which is offered for this purpose by some banks. This involves fixed EMIs for the initial 13 to 36 months, depending on the bank. Many banks offered teaser loans in the past, but a lot of them have discontinued it and only a few continue to provide it.
Other popular home loan products include Floating and Fixed home loan interest rates. As the name suggests, Floating rates fluctuate in accordance with base rates or the BPLR (whatever the case maybe). As far as Fixed home loan interest rate products go, you can avail any of the two types – fixed for the entire tenure or fixed for a certain period of time. If the interest rate is fixed for the entire tenure of the loan, then the EMI of your housing loan will be fixed for the entire tenure of the loan. But in case the interest rate is fixed only for a specific period of time, say 5 years, the bank can change its interest rate every 5 years.
Home Loans for Existing Borrowers:
If you are an existing home loan borrower with a good track record, you can consider shifting to a teaser rate scheme. The time and effort required to shift your existing loan to the new teaser home loan will definitely be worth it. To do that, the first order of business would be to shift from the old BPLR system to the new base rate regime which is not automatically applicable to the existing users and requires a separate application. For this, you will have to lodge an application with the concerned bank that will change the base rate. This system of setting up the base rate is more transparent than the one of fixing up the BPLR. Thus, converting your existing home loan to a base rate system can prove to be more beneficial to you than to stay in the old BPLR system.
Home Loan Application Process:
The process of applying for a home loan to getting it approved involves various stages:
Step 1: Filling the application form
Step 2: Personal discussion
Step 3: Bank’s Field Investigation
Step 4: Credit appraisal by the bank and loan sanction
Step 5: Offer letter
Step 6: Submission of legal documents & legal check
Step 7: Technical / Valuation check
Step 8: Valuation
Step 9: Registration of property documents
Step 10: Signing of agreements and submitting post-dated cheques
Step 11: Disbursement
Applying for a loan:
The first step is the filling of the application form. The type of the application form may differ from bank to bank but nearly 80 percent of the information they need is similar. Most of it is basically your personal and professional information, details of your financial assets and liabilities and details of the property (if finalized) including the estimated cost and the means of financing the same.
Documents to submit:
While submitting the application form, every bank asks for several documents. Most banks these days offer doorstep service, however, some banks still insist on a personal visit to their office at least once.