Getting a home loan is often a crucial first step towards realizing the dream of owning a property, which is a momentous occasion. Knowing how to get a home loan is essential whether you’re a first-time buyer or trying to improve your current living arrangement. You will be guided through the essential procedures in this guide to successfully obtain a home loan.
Types of Home Loan
- You can build a house on land you own with the help of a home construction loan.
- You can obtain additional financing for your current home loan with a top-up home loan.
- The Standard Home Loan allows you to purchase a newly constructed, pre-owned, or existing property.
- a mortgage loan to purchase a piece of land on which you plan to build a house shortly (within 36 months).
- You can add more floors, increase the size of your current home, and do other things with a home extension loan.
- Renovating your current home comes with costs that a home improvement loan helps to cover.
- With a balance transfer home loan, you can switch to Bank of Baroda from another lender and take advantage of lower interest rates.
- A pre-approved home loan allows you to finalize the purchase of a property based on your eligibility after receiving loan approval.
- A Pradhan Mantri Awas Yojana (PMAY) home loan entitles you to lower interest rates on your loan. PMAY policies state that this type of funding is beneficial if you fall into one of the following income categories: light-, medium-, or economically weaker.
Documents for Home Loan Application Process
- Your identity proof documents: A legitimate identity proof document is any document that has been approved by the government and has your photo on it. It might be your driver’s license, voter ID card, passport, Aadhaar card, PAN card, etc.
- Your address proof documents: A legitimate document proving your address can be any government-approved document that has your current or permanent address on it. It could be your Aadhaar Card, Passport, Driving License, Voter ID Card, Ration Card, Utility bills, etc.
- Your age-proof documents: Any government-approved document that includes your birthdate must be provided. Banks use age-proof documents to determine whether you are eligible for a loan if you are between the ages of 21 and 65 at the time of your last EMI payment. This document could be a driver’s license, passport, Aadhar card, or PAN card.
- Your income and employment proof documents: Documents proving your employment, such as your designation and offer letter, pay stubs, increment letters, etc., must be provided. You must present your bank statement, profit and loss statements, proof of business documents, etc. if you are self-employed or the owner of a business. Additionally, all applicants must submit their last three years’ worth of income tax returns.
Factors to Consider Before Applying Online for a Home Loan
- Think about the lending rate offered by the bank and the maximum loan amount that you qualify for given your income.
- To obtain an affordable home loan interest rate and repayment period of your choice, check your credit scores and ensure they are greater than 701 points.
- Repaying existing loans and credit card debt will raise your credit score and make you more eligible.
- If you want to drastically lower the monthly installment amount, think about choosing a loan with a longer term.
Eligibility
- NRIs and Indian nationals
- The maximum age to exit is 75 years old, and the minimum entry age is 18.
- People may apply individually or in combination with other qualified people.
How does the CIBIL Score work?
The Credit Information Bureau examines a person’s vast credit history before calculating their CIBIL score. Additionally, banks and other non-bank financial institutions (also known as non-banking financial companies) receive credit report services from the company. A person’s CIBIL score consists of three numbers ranging from 300 to 900 that represent their creditworthiness. A lower CIBIL score indicates responsible repayment practices and a positive credit history. To calculate a person’s CIBIL score, previous financial information from at least six months ago is used.
How to Get a Home Loan?
- Application: The first step is to complete the application by entering your name, contact information, pin code, job type, and other details. Our representative will contact you to proceed with the application process.
- Document Collection: KYC documents – Passport, Driving License, Aadhaar Card, Voter ID Card (any one) Your employee ID card Salary slips of the last 2 months Bank account statements for the last 3 months (salaried) / 6 months (self-employed) Document of proof of business of minimum 5 years (for businessmen/ self-employed individuals) Documents of the property to be mortgaged.
- Document processing and verification: Your documents will be processed and verified by the lender. They may contact your workplace or relevant organisation to confirm your employment or occupation. They will also check your credit report and CIBIL score in this step by conducting a credit inquiry. If your credit report and CIBIL score are satisfactory and all of your documentation is in order, your loan application will advance to the next stage.
- Sanction letter:
- Loan amount
- Rate of interest
- Repayment tenor
- Type of interest rate fixed or variable
- Secure fee payment: Once you sign the sanction letter, you must pay a one-time secure fee. The lender might also request that you pay this cost in advance.
- Legal and technical check: The lender will carry out a technical and legal check before releasing funds from your loan. They plan to send representatives to look over the property.
- Loan agreement and disbursal: The final agreement will be sent to you once the lender has completed all of its inspections. Your home loan amount will finally be disbursed by the terms.
Conclusion
How to Get a Home Loan, is multi-step and includes everything from choosing the appropriate loan type to assembling necessary paperwork and fulfilling eligibility requirements. Maintaining a solid credit score and being aware of the terms of the loan will help you get through the application process and closer to owning your ideal house.