Advice and guides to help improve your finances!

Housing Loans

Home loans are generally taken for either buying a house/flat or a plot of land for construction of a house, or renovation, extension and repairs.

Before starting with the home loan process, we must determine our total eligibility, which is dependent on our total repaying capacity.

Documents sought for loan approval

The loan application form gives a checklist of documents to be attached with it, along with a photograph.

Documents related to the purchase of the house

Identity and residence proofs

Salary details, tax payment details, bank statements

Some lenders may also require collateral security like the assignment of life insurance policies, pledge of shares, etc.

On the basis of the details submitted the bank decides whether or not the loan can be sanctioned.

Upon the approval of the loan, the bank will give the sanction letter stating the loan amount, tenure and the interest rate, among other terms of the home loan.

The loans can be disbursed in full or in instalments

In the case of an under construction property, the disbursement is made in instalments based on the progress of construction, as it is assessed by the lender. Ensure that an agreement is entered into with the developer wherein the payments are linked to the construction work  and not pre-defined on a time based schedule.