Home Loan Documentation Process – Explained!
If you have availed a home loan, you might know that your documents play a crucial part in the whole process. If you are planning to apply for a home loan, it is curial to note that the lender gathers your details and determines the approval of your application largely basis the documents you share. Lenders ask for quite a few documents to approve a home loan. It is imperative to know about them and the process they go through. Continue reading to know more about the documents required for home loan.
The application form is the first step of the home loan process. You can either download the application form from the lender’s website or fill it online. You must give accurate and updated details in the form. Your details should be the same as that mentioned on the supporting documents. Similarly, your signature in the application form and the other documents should match. You would also need to submit passport size photos with the application form.
Furnishing the supporting documents
As per the list of documents asked by the lender, you would need to submit some supporting documents for the home loan. These are identity proof, address proof, income documents and property documents. If you are a self-employed applicant, the lender can also ask for your business documents.
Evaluation of the documents
As soon as you submit the documents and application form, the lender starts the evaluation of the documents. The lender closely scrutinizes your new and current residential address, your credentials, workplace, etc. They might visit your residence and workplace to verify the details provided. Ensure that you do not submit any fake document as it can lead to a criminal offence and cause you legal trouble.
Once the lender has assessed your eligibility and repayment capacity through your documents, they prepare an offer letter and send you its certified copy. The offer letter contains your loan amount, interest rate, tenure, mode of repayment and terms, conditions and policies of the loan.
Submitting the property documents
Once you accept the offer letter, the bank starts the valuation of the property you want to purchase. You would need to submit all the original documents of the property, which will remain with the lender until you repay the loan. The lender asks for the original documents of property to gather its details and as an added security. Through property documents, they collect details like name, identification and address of the seller, address of the property, proof and chain of ownership, etc.
After all the paperwork is done and the lender has completed the technical and legal verification of the property, they prepare and register the loan agreement. The lender’s lawyer stamps and signs the agreement asking you to do the same. Once you sign the loan agreement your home loan process is complete.
Once the documentation process is complete, and everything is approved, you get the loan amount. For the loan disbursement, the lender can hand you a cheque or transfer the loan amount to the seller’s account. As documentation is a crucial aspect of a home loan, you must always furnish accurate and updated documents to avoid getting rejected.