1. Short listing of a Banker
Remember, it is always better to approach a banker who
is best known to you. If you are a known account holder
with satisfactory record, it is easier for the banker to
assess your credit worthiness. Never enter into a new bank
branch just for the home loan. If you chose reputed Real
Estate Company or Builder in Hyderabad, that will be double
positive for you. You will be accorded priority in loan
sanction. A few banks may offer free bees also.
2. Submission of application
Submission of the application is the second step. Typically,
basic information about your Job, Profession, is saving
habits, assets, liabilities details of the employer, dependent
family members, property, estimated cost, and your means
of financing the same. You have to submit many documents
along with the application as a proof for your claim. These
include…
Proof of income: This will be the primary proof. Everything
will begin with this only. All the banks insist on last
three years Income Tax Return forms- Form 16. Bank account
statement for the last six months. Salary slips or certificates,
age proof, address proof and identification proof.
Age and address proof: You need to submit any one from
list given below. Copy of your SSC certificate/Driving
license/Passport/ration card/PAN card/Electoral Identity
Card. PAN Card, Electoral Identity card, Driving license
card are suffice for the address proof.
Identity proof: Here also PAN, Driving License Card, Passport
will do the needful.
Employers Details: If you are not working in Government
or reputed private company you need to provide details
of your employer. You need to provide brief information
about the nature of your employer, business activity, financial
status, turnover, profit, major customers, number of employees
etc, etc.
Financial scrutiny
The forms, statements submitted by you are the basis
for the banker to decide whether you are eligible for home
loan or not. Each one of the document will tell volumes
about you.
If you are a Businessmen or a Professional… banker
looks out your bank account statement to know the level
of business activity. It speaks volumes about your financial
health. If you have a habit of keeping the bank account
empty most of the time, you may be in trouble. It is always
advisable to keep sufficient amount in your bank account.
It will be a plus point for you.
Be aware... bounced cheques will prove to be major negative
factor for your efforts. One or two instances may be pardoned.
Each and every bank will have specific norms as to how
many such bounces are acceptable in a period of one year.
Account statement will also mirror your payments to the
banker, financial institution. In this case you will need
to provide full details to the Present lender.
Never hesitate to submit full details of your existing
investments. A Clean Bank Statement, with regular savings
and investment record will certainly appreciated by the
banker.
Processing Fee:
Processing an application is a complicated process and
job, which requires expert services. That is the reason
why banks collect processing fee upfront. You need to pay
fee while submitting the application itself. Processing
fee
Varies from bank to bank. It is normally around 0.25%
to 0.50% of the total loan amount. For example, if you
take 10 lakh loans, you will have to pay around Rs 2,500
to Rs 5,000 as processing fee. Some banks may charge fixed
amount which is ranging from Rs. 5,000 to 10,000. On special
occasion banks usually waive the processing fee.
Some banks may not charge processing fee upfront. But
look out... You may need to pay legal charges or administrative
fees.
As far as possible, pick best residential properties from
reputed builder in Hyderabad. Their properties will normally
be approved by the bankers. Bankers offer loans on easier
terms and offer discount in processing fee. You may get
loans with cheaper rates also.
3 Personal discussions:
This process can be compared with written test. If your
answer sheet that is application form found OK in all respect
you may be called for oral interview in the form of personal
discussion. Typically banks take anything from 10 days
to 30 days to evaluate your application. The aim of the
personal discussion is to gather more details about you,
which may not be mentioned in the application. So you are
required to keep all the relevant documents along with
you while going for personal discussion. Very few banks
follow personal discussion root these days.
4. Field Investigation:
Banks never go blindly. The bank verifies all the information
submitted by you including your residential address, place
of employment, employer credentials, residence and work
telephone numbers. Normally this verification process will
be outsourced to the specialized agencies.
5. Credit appraisal and loan sanction:
This stage will set for deal or no deal. If the banker
satisfied with your application and credentials, rest assured… you
will be getting a home loan to buy residential property
in Hyderabad.
The banker then issues a Home Loan Sanction Letter. Sanction
letter may either be an unconditional one, or may have
certain terms and conditions, which you have to fulfil
before the loan amount disbursed.
6. Home Loan Offer Letter:
Home
Loan Sanction or Home Loan Offer Letter typically contains
the following details. Loan amount
rate of Interest, type (Whether fixed or floating), if
the rate is floating then the reference rate, periodicity
of the rate revising, tenure , mode of repayment etc.
* Acceptance copy
If you agree with the details mentioned in the home loan
offer letter, you will have to sign a duplicate letter
of the same for the bank's records.
Never sign on dotted line without verifying the details
like… the rate of interest, loan amount on the offer
letter is the same that was discussed and mutually agreed
upon.
7. Submission of property documents:
You are required to hand over the entire set of original
documents pertaining to your property to the bank. Again,
if you have chosen a reputed builders property, and the
property is approved on this may not be necessary, as the
banker already in possession of the above said documents.
Otherwise, you have to submit all the original documents
pertaining to the proposed property. Which normally include,
documents, link documents relates with the land, sanctioned
plan, building plan, architect-structure designers certificate,
no objection certificate from the concerned authorities
etc.
Legal scrutiny:
Bank checks thoroughly all the documents submitted by
you. This is to validate their authenticity. Even the Agreement
of Sale you will be entering into with your seller will
also be scrutinized thoroughly. For this scrutiny, every
bank will have a panel of legal experts. Scrutiny job will
be entrusted to one of the members in the panel. Some banks
may have in-house legal experts. Even if you pass the financial
acid test, unless you cross this hurdle, loan may not be
disbursed. If the document found clear in all respects
the lawyer will gives a go ahead. Sometimes legal expert
may call for additional documents.
So, if a bank decides to disburse loan, you have all reasons
to smile. You can safely assume that your property is clear
and free from all litigations.
8. Technical Evaluation:
Banks will send an expert to visit the premises you intend
to purchase. Normally this job is done by Civil Engineer
or an Architect. Some banks may send senior employees to
evaluate the property. The main aim of this evaluation
process is to ascertain the quality of construction. If
the property is under construction, to determine the stage
of construction is the same as that mentioned in the payment
notice issued to you by the builder. Banker also tries
to confirm Layout of flats and area of property is within
permissions granted by the concerning local body.
9 Valuations
Banks carry out an independent valuation to determine
whether purchase is in line with the existing market price
of the area where property exists. Valuation is the key
yardstick in determining the loan amount that can be sanctioned
by the bank. The valuation issue rarely arises when property
in Hyderabad is purchased from a reputed builder and the
residential apartment is pre approved one.
10. Signing the home loan agreement:
You are required to enter in to a tripartite agreement
with the builder, banker.
You also need to submit post-dated cheques for the first
36 months if you agree for this mode of repayment. This
agreement will contain a condition binding on the builder
to hand over the documents after the registration.
11. Registration:
After the legal scrutiny and technical verification
and evaluation the draft documents as cleared by the
lawyer
need to register with the Sub Registrar. Registration
fee and the relevant charges are to be borne by you.
12 Disbursement:
Banks typically finance up to 80-85 percent of the property
value. That means you have to contribute at least 15 percent
of the property value from your own funds. In banking parlance,
it is called the Margin. Registration charges and the cost
for interior decoration may be considered the part of the
property value. Before commencing disbursal you need to
submit documents to prove that you have paid the margin
money. Many of you may need to withdraw moneys from Provident
fund. It may take a while to receive money from PF Authorities.
If that is the case, you need to provide sufficient evidence
for the same. It is only after submitting this proof that
the bank will release part-disbursement of the loan. Directly
to the builder. So the cheque will be in the name of the
builder. .
Usually, loans are disbursed on the basis of the stage
of construction of the residential apartment. In case
of resale or ready to occupy properties, the disbursement
is full and final.
In case of part disbursal, the bank does not start to
deduct Equated Monthly Instalment (EMI)s immediately. Since
the EMI is calculated on the total loan amount at a particular
rate of interest and for a given tenure. Banks charge simple
interest on the partly disbursed loan amount. For instance,
if you have a sanctioned loan of Rs 25 lakh but the property
is under construction and the bank has disbursed only Rs.
10 lakh only, , you will be charged a simple interest only
on the 10 lakh only.
This continues until the final disbursement is done. The
simple interest paid is called Pre-EMI interest or Pre-EMI.
For Pre-EMI payments, banks may take only around six to
24 post-dated cheques.
* So try to choose a ready to occupy property. You will
be relieved from Pre EMI payments and the repayment starts
immediately. You will not be burdened with rent as well
as Pre EMI payment.
...