What is the Home Loan Process?

What is the Home Loan Process?

You might consider foreclosing if the Home Loan interest rate is higher than your investment rates.

Millions of urban Indians opt for Home Loans to buy their dream homes. However, not everyone is familiar with the application process. Many applications get rejected due to this, or borrowers find themselves in a bind because they cannot repay their debts. A Home Loan application involves multiple stages that are difficult for applicants. However, the online method has made the process quicker and connected charges like Home Loan interest affordable:

Step 1: Application

Submit a completed application form along with relevant documents such as ID proofs, address proofs, income proofs, etc. If you apply with a co-applicant, you should furnish documents of the co-applicant and take their signature on the application form. If you have already shortlisted a property, fill out the form and submit photocopies of the property-related documents for legal evaluation.

Step 2: Loan Acceptance

The appraisal procedure begins after you submit documents. Determination of eligibility depends on specific facts such as income, liabilities, credit score, etc. Besides these, an evaluation of your firm and your cash flow occurs if you are self-employed.

Field credit investigation also takes place, wherein a representative may phone you or visit your home or office to check the information you provide on the application form. Further, the bank decides your eligibility.

Step 3: Legal and Technical Validation

You also need to send essential property-related papers. These include the entire chain of title documents (in the case of resale property), the selling agreement with the builder, the NOC (no-objection certificate), the OC (occupancy certificate), and others that the bank requires. A technical inspection of the property ensures that it is built by the approved plans and regulations, thereby deciding the market value.

Step 4: Loan Sanction

The bank provides a sanction letter once they decide your creditworthiness and verify the legal and technical features of the property. The letter includes:

● The total amount sanctioned

Bank Home Loan Interest Rates

● The relevant interest rate type (fixed or floating interest rate)

● Loan duration

● Equated monthly installment amount

● The legality of the letter

● Special conditions (if any) to be met before disbursement

● Additional terms and conditions

Step 5: Loan Payment

After performing credit, legal, and technical verification, the bank asks for original title documents. This is where the cheque disbursement process takes place. Before the lender disburses the cheque, you need to sign the agreement.


Before applying for Housing Loans, thoroughly grasp the process and the following repayment duties. You might consider foreclosing if the Home Loan interest rate is higher than your investment rates. Invest your time in market research and make an informed decision.