Real estate sector in Chennai is expected to witness a constant growth for the upcoming few years as the number of new units launched may increase by 17% in 2019 as compared to the previous year.
The reason behind this rapid growth is the rising number of automobile, manufacturing and IT industries in this city. This speedy development is creating massive employment and driving more housing demand.
To address this situation, financial institutions have simplified the process to avail a home loan in Chennai so that professionals shifting to this city can buy affordable houses.
Process of Home Loan in Chennai
The steps mentioned below will provide you with a complete guideline regarding the home loan process in Chennai.
Step 1 – Applying for a Housing Credit
Borrowers are required to find a suitable lender by taking into account various factors including interest rates, benefits offered, loan amounts, etc.
However, they should be aware that the terms that a lender offers are based on their eligibility. There are several reasons why lenders may reject a home loan application, which applicants must know and avoid.
Once they have selected a lender, borrowers are required to fill out an application form. Financial institutions will ask for personal details, address proof, identity proof, income proof, etc. Some lenders may also require additional documents in case the applicant is self-employed.
Step 2 – Repayment Capability Evaluation
Lenders will commence the verification process after submission of an application form. They will decide a loan amount depending on the credit history of an applicant. Hence, it is crucial to have a healthy CIBIL score to avail of home loans with a high amount.
In this step, financial institutions will evaluate the repayment capability of a borrower. They can ask for additional documents if required. For physical verification of the provided details, representatives of the lender may visit the office or residence of a borrower.
Step 3 – Sanction of the Loan
After successful verification of required information, financial institutions send an offer letter to the borrower mentioning the loan amount, home loan interest rate, tenor and other terms. If a borrower accepts an offer, the lender will ask them to submit a duly signed offer letter. Borrowers are required to submit the letter to continue the process.
Step 4 – Verification of the Property
Financial institutions conduct a physical verification on the property after agreement of the loan terms. This step is very crucial in the home loan process for the lenders as they need to make sure that there is no dispute regarding the property and that they can liquidate it in case of default.
Step 5 – Loan Amount Disbursal
After completion of the formalities, lenders initiate a registration process. Borrowers are required to submit all the property-related documents and sign a home loan agreement. Sanctioned amount is disbursed in a lump sum or parts after that.
Financial institutions charge a processing fee from the sanctioned amount. It is a charge associated with the home loan online apply process and is non-refundable. Lenders charge this fee to process the documents, post-dated cheques and to send tax certificates annually.
These above steps can be quite time-consuming owing to the lengthy verification process of a centralized financial institution.
The steps mentioned above will guide you through a home loan process in Chennai. Make sure that you calculate your debt obligations using a house loan EMI calculator before you opt for the procedure.