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Buying a house has become a lot easier than decades ago. This is because of the availability of home loans in India on easier terms. Before starting your home loan process you should know about your eligibility for repaying the loan. A bank will never grant you a loan if they are not sure that you will repay the loan. Here is the complete guide to the home loan process.

A home loan application

The first step is to apply for a home loan by filing a home loan application. Your bank will scrutinise your financial position to analyse your eligibility in making payments. For this purpose, the bank will ask you to submit a set of documents such as identity proof, age proof, address proof, employment details, income proof, details of existing properties etc. 

Processing Fee

Bank will charge processing fees to initiate your home loan procedure. These charges could be around 1% or less than 1%. Processing fees are paid when you submit all your documents. 

Verification

Once you have filed a home loan application and the processing fees, the bank will start the verification of all your documents. Verification is done to know the type of employment and your credit reliability. Your bank will grant the loan once it is assured that you will repay the entire loan in time. 

Sanction letter

When you have submitted all the papers, and your bank is satisfied by your repayment capability, you will be sanctioned a loan. You will have to sign on an acceptance paper that might have some terms and conditions. Read all terms carefully before signing the agreement. Your bank may also charge administrative cost at this stage. However, this cost is minimal. 

Property verification

Property verification is done to assess the market value of a property put up as collateral for a loan. Banks have the right to liquidate this property to recover the full amount of the loan in case of breach and inability of repayment. Banks follow their own set of parameters to assess the value of the collateral that is considered a basis for disbursement. 

Home loan agreement

Once you complete all above details, you are required to prepare all legal documents and turn in them. You will sign an agreement, and your loan will be approved.

Home loan EMI calculator

EMI refers to equated monthly instalments. It includes a fixed percentage of principal amount plus interest on the outstanding balance of your home loan. To know about the approximate value of your EMIs, you can use a house loan calculator.