An Applicant approaches Bank with documents supporting their Employment,Income,Residence and Age Proofs. The Bank then conducts a scrutiny of applicant’s submitted documents. After positive verification, the applicant is issued loan sanction letter. The loan sanction letter contains Bank offer to Applicant. This is Sanction process. If, applicant agrees through a mutual acceptance letter; he is given loan amount as part of disbursement process.
Lets Break It Down :
0). Ground Zero
Each applicant are required to find out different home loan products and then compare them. Take your time and ask around as to how to go about home loan. Home Loan is a complex bank product and it is alright to little lost, as there are many factors to consider. If you have spent months finding the best nest for you, then you should spend the same time in Home Loan.
Sticking to Home Loan process, lets assume you have decided upon a Bank X to apply.
1). Do your Home Loan Documents
The most frustrating part of taking a home is documentation. There is nothing smart about the documentation process. Here is a list of documents to prepare. Once you have ALL the documents, before calling Bank X, You have saved almost 2 weeks. (In typical scenario, Bank Agents take 3 documents, then call 4 days later for 3 more and 2 weeks later for 4 more documents.)
2). Home Loan Application
Bank X will provide you a form to fill and submit. While you are at the bank, show them your documents and ask for GFE(Good Faith Estimate) of your Home Loan interest and processing Fee. Please take the form back home and take your time reading it. This will also give you time to compare bank X offer with Bank Y.
Note : Your home loan documents submitted are used for credit risk rating. Your Home Loan Interest Rates are only committed, after Home Loan Sanction process.
3). Submit Application
Fill out all details in home loan application form and take all your documents to bank X. Submit the form and documents to Bank official and take acknowledgement of all documents submitted. Ask the bank about the time they will take for Sanction process.
Note : Once you apply, the processing fee is non refundable, even on loan rejection.
4). Applicant Verification ( Address, Age, Income source, credit history, assets, liabilities etc )
5). Condition Sanction Letter
If the Bank find you credit worthy, they will lend you. An offer letter is sent to you by Bank. Or they are required to tell you the rejection reason.
6). Property Documents
Let the Bank now about decision. Good time to negotiate on the offer with Bank X. If you accept, Bank X now needs all documents for legal verification of yours (to be) property.
7). Property Legal Verification & valuation
8). Property Registration and Signing
9). Home Loan Disbursement