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Housing market prices have skyrocketed in the last few months. However, it hasn\u2019t led to a steep decline in either demand or sales. Instead, a majority of new home buyers, even young and first-time buyers, have set their hearts on mid-end (Rs. 40 \u2013 Rs. 80 lakhs) and high-end (Rs. 80 \u2013 Rs. 1.5 crores) properties. One of the factors behind this has been the simplicity of getting a home loan:<\/p>\n\n\n\n
In this article, we will go through the home loan sanction and disbursement process in detail for the benefit of individuals who might be interested in taking a home loan<\/a>.<\/p>\n\n\n\n <\/p>\n\n\n\n As already mentioned, it\u2019s up to the bank to approve any loan application after verifying the applicant\u2019s background, required documents<\/a>, and CIBIL score<\/a>. The \u201cquantum of loan\u201d that can be approved also depends on these factors. Once the application is sanctioned, the bank will issue a home loan sanction letter which will include details regarding the loan amount, tenure and interest rate and other relevant information regarding the loan for the rest of the home loan disbursement process. <\/p>\n\n\n\n When the bank approves a loan, it indicates that the borrower can now confirm the booking of the property and make the down payment. Sanctioning of the home loan depends on the applicant\u2019s income. Banks usually sanction a maximum of 80% of the value of the property as a loan. The amount has to be repaid within a stipulated period.<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n An applicant must pay at least 10-20% of the total property cost from their pocket. Banks approve a maximum of 80-90% of the property value. An applicant may, however, opt for a lower loan amount.<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n A sanction letter is a document that signifies that the applicant\u2019s home loan has been approved by the bank. Here\u2019s what a sanction letter is composed of:<\/p>\n\n\n\n On receiving the sanction letter, the applicant has to sign an acceptance copy and submit it within the \u201cvalid until\u201d date.<\/p>\n\n\n\n <\/p>\n\n\n\n After the home loan has been sanctioned, the disbursement process takes place. The actual disbursement is done through the home loan cheque disbursement process. The cheque is issued in favour of the seller of the property, which is handed over after the actual process of registration.<\/p>\n\n\n\n <\/p>\n\n\n\n The home loan disbursement process starts once the loan is sanctioned. The buyer pays 20% of the property value. The home loan disbursement allows the borrower to pay the balance amount to the builder and complete the payment process. For a resale property, the entire loan amount is disbursed at once. If the property is new, banks make the payment to the builder according to the terms and conditions mentioned in the agreement and depending on the various stages of the construction. The borrower usually starts repaying the loan as EMI immediately after the loan disbursement.<\/p>\n\n\n\n <\/p>\n\n\n\n There are multiple stages (usually three) in the home loan disbursement when the lender disburses loans in instalments. Disbursement in instalments is usually done when the property being purchased is an under-constructed one. The payments are made depending on the stage of construction of the property.<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n Home loan interest rates<\/a> are of two types: fixed or flexible.<\/p>\n\n\n\n <\/p>\n\n\n\n There\u2019s no place like home. Many people dream of owning a home. The availability of home loans has helped many people to realise their dreams of owning one. Understanding the various home loan disbursement stages helps to expedite the entire home loan amount disbursement process. If you are looking for a home loan to purchase property, get in touch with Tata Capital<\/a> for tailor-made home loans with an attractive rate of interest starting at 7.75%.<\/p>\n\n\n\nHow does the home loan sanction and disbursement process work?<\/strong><\/h2>\n\n\n\n
The home loan disbursement process is when the loan amount is actually delivered to the borrower. The time between loan sanction and disbursement is when the bank carries out technical, legal and relevant checks. The borrower has to produce the allotment letter, photocopies of the title deed, the encumbrance certificate, and the agreement to sell at the time of the disbursal.
Banks follow a specific home loan sanction letter format which they follow. The validity of the home loan sanction letter needs to be checked by the borrower.
The home loan sanction letter format will also contain details of the interest rate prevailing on the disbursement date. If all documents are submitted on time, it helps to reduce the \u200b\u200btime between loan sanction and disbursement. This is the home loan disbursement process.<\/p>\n\n\n\nHousing loan sanction process<\/strong><\/h2>\n\n\n\n
Home loan sanction criteria:<\/strong><\/h3>\n\n\n\n
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Banks decide the eligibility of an applicant based on his income, income stability, CIBIL score, liabilities, etc. If an applicant has a high monthly income, they will be eligible for a bigger loan amount. Usually, banks consider that the borrower will make use of 50% of his monthly income to repay the loan.<\/li>\n<\/ul>\n\n\n\n\n
Banks may approve loans for buying plots on which the borrower will construct a house<\/a> or for buying an under-construction or a readymade property, whether new or old. Banks offer loans for repairs<\/a> or additions to property<\/a> as well.<\/li>\n<\/ul>\n\n\n\n\n
The applicant should submit a copy of the property\u2019s sanctioned construction plan, approved by a competent authority. Delay in submission could lead to increasing the time between loan sanction and disbursement.<\/li>\n<\/ul>\n\n\n\nHome loan sanction limit<\/strong><\/h3>\n\n\n\n
Documents required<\/strong><\/h3>\n\n\n\n
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Home Loan Sanction letter<\/strong><\/h3>\n\n\n\n
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Home loan process after sanction<\/strong><\/h3>\n\n\n\n
Procedure for home loan disbursement<\/strong><\/h2>\n\n\n\n
Home loan disbursement stages<\/strong><\/h3>\n\n\n\n
Home loan disbursement criteria<\/strong><\/h3>\n\n\n\n
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The interest rate options<\/strong><\/h3>\n\n\n\n
Conclusion<\/strong><\/h4>\n\n\n\n