3 Stages of Home Loan Verification Process

A Home Loan is borrowed from financial institutions, for the purpose of buying or constructing a home, by the borrowing individual. This is a Personal Loan offered, based on many factors – importantly the repaying capacity of the borrower. Normally a Home Loan will run into several lakhs of Rupees, since the property rates in India have gone up very high in the recent decades.

As the amount is high, naturally the lending institutions will take all precautions, in verifying various criteria that make the entire process viable and possible. Almost all home loan plans online follow the same terms and conditions, and stages of verification.

The Home Loan process commences, when the borrower submits the Loan application. It is the responsibility of the borrower to ensure that all the required documentary proofs are submitted, along with the application. There is a Processing Fee for Home Loan applications, and this non-refundable Fee should be paid in advance by the borrower.

Once the application is received at the Bank, it is being processed further for sanctioning the Loan amount requested for. In this process, there are 3 stages of verification by the lending Bank, before disbursing the loan amount.

Stage 1 – Verification of the applicant and the details furnished by the applicant in the Home Loan application. There are certain stipulations for granting a Home Loan, based on the eligibility of the applicant. These eligibility criteria should be checked, either by inviting the applicant to the Bank in person, or sending an authorized representative of the Bank to the residence of the applicant. The workplace of the applicant may also be visited and verified to satisfy the employment particulars.

Stage 2 – Verification of the Repaying Capacity – This process will involve checking the income of the applicant, properties if any held, the liabilities existing for fulfillment by the applicant etc., to get convinced that the applicant is in a position to promptly repay the Home Loan, if granted.

Stage 3 – Verification of the Property for which the Home Loan is applied for. The Bank Officials will check thoroughly the Property Documents like the Title Deed, Encumbrance Certificate, Plan Approval if the Loan is for building a Home, and any other related document as required by the Bank. The procedures are entirely different from those followed by Banks, when granting online used car loan India.

Only after completion of the Verifications mentioned above, the Bank will issue Sanction Letter of the Home Loan, after getting Acceptance of the Term of Loan, Rate of Interest and other conditions, by the borrower.