Navigating the Verification Process for Home Loan Approval
For many people, owning a house is the most prominent symbol and centrepiece of security and stability. People nowadays with increasing costs of real estate seem to be struggling more and more to make this dream a reality. For many, obtaining a home loan is the answer to the puzzle.
As approving a home loan is a vital step for any lender, a detailed verification process for home loans takes place after the submission of a loan application. The following step-by-step description of the home loan verification process can ease one’s path to home ownership.
What is a home loan verification process?
The Home loan verification process involves the authentication and valuation of the real estate property the applicant wants to purchase. A financial institution performs the verification process to determine the final loan amount.
A verification process ensures that the loan amount is adequate against the property value. Applicants submit original documents to help the lender conduct this verification. These documents also ensure that the property that a person is purchasing is not associated with legal obligations.
Step-by-step verification process for a home loan
The verification process for home loan applications in India follows this step-by-step pattern outlined below:
Step 1: The lender’s agents will contact the applicant after they have submitted the complete home loan application form and it got approved.
Step 2: After that the representatives of the financial institution will explain the remaining application process. An applicant will need to submit documents concerning their financial state, income employment history, etc.
Step 3: In the next stage, a financial institution assesses the authenticity of the provided information.
Step 4: The financial institution approves an application after the information verification and sends the applicant a home loan sanction letter.
Step 5: If an applicant has by then finalised a property, the lender will immediately proceed with the property verification process. This process consists of two parts: legal verification (assessment of property papers to check for regulatory approval, undisputed ownership, etc) and technical verification (assessment of the property by checking the building integrity, age, etc.).
Step 6: After property verification, a lender confirms the loan details. After knowing the loan details an applicant has to make the downpayment for the property and request for disbursal. The loan disbursal process can take 48 hours.
What are the documents required for a home loan?
Applicants wondering about home loan verification can also benefit from knowing a list of documents that applicants generally need to submit with a home loan application. Here is a list of those documents:
- Proof of address and identity
- PAN card or Form 60
- Recent salary slips, or Form 16
- Business-related papers for self-employed people
- Personal bank account statements (up to 6 months)
- Property documents (Agreement, Tax Receipts, Title Deed, etc.)
- Documents that verify a business vintage of up to 5 years in the ongoing enterprise (applicable only for self-employed applicants)
However, lenders might request the submission of some additional documents during the verification process if necessary.
Many financial institutions extend pre-approved loan offers to existing customers to speed up their loan verification process. These offers are usually applicable on a home loan and loan against property. Interested individuals can check their pre-approved offer from the official website of the financial institution by entering the necessary details.
This whole verification process for home loans generally takes 1 to 2 weeks. If a borrower has completed their property construction they will receive the full loan amount. In case the construction is ongoing, the disbursement can be in stages.
