When it comes to buying a home of any sort, the simplest and fastest way to arrange funds is to secure a home loan which is now available at much reasonable rates. Since buying a home involved a large sum of money, not everyone has that much funds ready for payment. This is why most people look towards a home loan to fulfill their home buying needs. But before you apply for a home loan, it is necessary to be aware of the entire procedure so that you can take the right approach towards the home loan procurement.
In this following post, you will get to know everything about the disbursal of home loan. For example, the process will be explained in the form of steps that would be much easier to understand.
Home Loan Disbursement Process, For a home loan borrower, seeking a home loan may seem easy but from the lender’s perspective, it is quite complex. Every home loan application goes through scrutiny before the home loan is sanctioned and the amount is disbursed. Home loan disbursement is one of the stages of home loan sanction. Put simply, it refers to the discharge of the sanctioned amount to the beneficiary’s account (property seller or the builder). In the following part of this post, we will the home loan disbursement process.
For a home loan borrower, home loan disbursement is something necessary to know as it is the final step of securing a home loan. Hence, before the loan is disbursed, all other related procedures must be completed in a prescribed manner. For example all the identity, address and income related documents are submitted at the time of application, they are checked and verified in all possible way, then a home loan sanction letter is issued, and eventually the loan is disbursed. Overall, it is a highly complex process and banks follow it very strictly to ensure the all things remain valid both for the lender and the borrower.
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Stage 1: the loan disbursement is the final step of the entire home loan application. The initial step of the process is to submit the home loan application followed by the allotment of loan sanction letter, and last is home loan disbursement. However, this home loan disbursement may have several stages altogether that you will get to know here in this post.
The loan borrower will receive a sanction letter from the bank once your home loan disbursement is approved. This letter will be inclusive of the disbursed amount, payment date, loan tenure, interest rate, and the validity of the allocation letter.
Stage 2: After the receipt of the letter approving the authorization of the house loan disbursement, the borrower should present the bank representative with an "own contribution receipt". Once it is done, the bank or lender will provide you the date of the initial installment. Before the start of the final payment disbursement, the borrower would be asked to produce various documents such the allotment/sanction letter, encumbrance certificate, agreement copy and credit facility receipt. These docs are used by the bank to validate the legality of the property.
The bank will process the home loan pay-out amount following the fulfilment of all requirements and in accordance with the terms and conditions of the sanction letter. The interest rate specified in the sanction letter does not necessarily oblige the bank to pay it. The bank will produce a fresh sanction letter since it is allowed to charge interest based on the day the money is disbursed, not the day specified in the initial sanction letter.
Stage 3: On the basis of the borrower’s credit profile and the level of property development (ready-to-move or under construction, the bank may pay the entire sum at once or in instalments as per the payment plan. The whole amount of the mortgage will be disbursed by the bank if the property is ready for possession. In most cases, borrowers with an excellent track record and a high credit score are qualified for a pre-approved house loan.
1. What Are The Existing Home Loan Interest Rates?
The existing home loan interest rates hover between 8 and 11% in most cases.
2. What Time Does It Usually Take To Get A Sanction On A House Loan?
Once you submit the required documents, getting a home loan approved by most banks just takes 5 working days.
3. Can I Receive Online Permission On A Home Loan Right Away?
Yes, today borrowers can get immediate in-principle approval. However, after reviewing all documentation and procedures, a final punishment will be granted.
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Whether you are looking to buy a flat, an apartment, a villa, a residential plot or any other property, the application for a home loan remains same. So, if you are looking to get a home loan in Delhi, go through the home loan disbursement procedure to understand the basics and plan your home buying accordingly.