Everyone wants to own a house of their own. It is considered as one of the biggest achievements in a man’s life. But in today’s market, the cost of owning a house is soaring up really fast. Therefore more and more people are taking the help of home loans to fulfill their dreams.
Home loans are granted for either buying a home or a flat, or for buying land for the purpose of construction. Home loans can also be taken to repair or renovate an already existing house.
There are certain things that you should have knowledge about before applying for a home loan. They are:
The amount of loan you are eligible for
The eligibility of a person depends upon the repaying capacity of him. You will be granted that much amount of money that you can repay back. Your total monthly income and the other extra income that you have will determine your repaying capacity.
The bank officers also make sure whether you will be able to repay back the loan along with the interest in the particular time limit you will be granted. The more is your monthly income the more is the amount of the loan granted. The total amount of repayment depends upon the tenure of the loan and its interest. The interest can be fixed or flexible.
The documents necessary to approve a home loan
The original legal documents that are related to the purchase of the house or flat or land has to be provided to the bank. You will have to submit your identity proof and address proof. You will need to submit your recent salary slip which should be attested by your employer and self-attested by you.
You will also have to submit Form 16 if you work under an organization or income tax return files if you are self-employed. Along with that your bank statement for the past six months is also required and most importantly your recent photographs. Many lenders also ask to submit some security documents like life insurance policy papers, mutual funds’ file, bank fixed deposits’ documents, etc.
The approval and disbursement of the loan
After checking the documents thoroughly that you have submitted, the bank decides whether to approve the loan or not. The amount of loan that can be granted is also decided on this basis. The bank will issue a sanction letter on your name which will mention the details of the amount that can be granted, the interest payable and the tenure of the loan. You can apply for an amount that is less than or equal to the approval limit set for you, but not more than that.
The loan is disbursed either at a single time or in installments. There are usually three installments provided if the property is under construction. If the construction is ready then the total amount is disbursed.
So if you are planning to get a home loan then go through the above details thoroughly.Older Articles New Articles