Home loan process for resale flats
Buying a home is a process of very complexity. People often choose to purchase new or under-construction properties. Usually, these people have to wait a couple of months, if not years, to take possession of their house. But if given a choice, one would always prefer to move into their new home as soon as the purchase process is completed. Well, a whole resale property industry, called the secondary housing sector, exists for this reason. Yet the condition is only feasible if the transaction is done without home loan assistance.
But if you're planning to Take a home loan out of the resale market to buy a house, there are a few things you need to consider. This is what you need to know about loaning resale flats.
Quick Eligibility Check
The very first step should be to ascertain how much home loan you are eligible to take advantage of. There are plenty of home loan EMI calculators but for every lakh borrowed for a 15-year loan term approximately one has to pay an EMI of Rs 1000/- per month. This will take about two weeks to process the entire loan. When the value of the property reaches 20 lakhs, you can make use of a maximum loan equal to 80%. Stamp Duty & Registration expenses (approximately 5.6 percent of the selling value) are not included in this and are typically met by yourself.
Pre Approval loan letter from a bank of your choice
Many banks have a website where you can fill out a small form, and you will be contacted by the correct loan representative. You can also visit the bank's nearest branch from which you wish to take advantage of your loan. The loan agents of the Bank will provide the required assistance.
After thorough evaluation of your credit history / CIBIL Score and your income and expense data, the bank pre-approves a certain loan amount. If any, the co-applicants must be added here. The bank will send you a letter of prior approval for the loan authorization. The letter, along with the terms and conditions of the loan, will be valid for a certain period of time which will be explicitly stated in the letter itself. Some banks can charge a small processing fee to get a loan pre-approved.
Execute the sale agreement
When you have chosen your dream house, make sure you and the seller settle on a final price and on all contract terms. You can consult an experienced lawyer to assist you in drafting the purchase agreement. Before starting the home loan process an executed sale agreement between you and the seller is required.
Keep your personal documents handy
Banks allow you (and your co-applicants) to apply these specific documents along with the Loan Application Form before you start processing your loan. Those are-Passport size photos, proof of identity (copies of Voters ID / Passport / Driving license / PAN card), proof of residency (copies of latest Phone Bills / Electricity Bill) and last six months Statement of Bank Account, initial employer pay certificate and copy of IT Returns for the past two financial years. If any, those documents must also be submitted by co-applicants.
Apply for Home Loan
Fill in the Request for Home Loan & Send all the relevant documents and the selling agreement executed above. There is a minor transaction fee that must be charged along with the request for loan.
Submit Property Documents
Photocopies of all the property documents will need to be sent primarily-previous sale deeds, mother deeds, tax-paying receipts, new encumbrance certificates, RTCs, building permit plans, Khata certificate and Khata extract. The bank will conduct independent Legal Verification of the property through a panel lawyer. The lawyer will issue Legal Verification Report to the bank directly, which will not be shared with you. For technical assessment, the bank will appoint a valuer to fix the fair market value of the property. The objective of this exercise is to ensure that an appropriate loan amount is approved against the property.
Home Loan Sanction
The bank will then sanction the house loan against the property after verification. You will now have to sign an agreement on home loan. The home loan arrangement must include all Home Loan terms and conditions. You will also need to apply the original executed sales agreement, ECS along with cheques and other undertakings as necessary by the bank to complete the process of home loan.
Preparing the Sale Deed
Now you will need the assistance of a property lawyer to draft the sale deed or deed of conveyance, which needs to be registered at the appropriate sub registrar’s office.
This is essentially the ownership transfer documents, which will make you the “absolute owner” of the property. Registration of this sale deed is commonly known as “property registration”.
Home Loan Disbursement
You can finalize the date of registration of the property in conjunction with the seller after the Home Loan Agreement is signed. One day prior to registration the bank will provide you with a photocopy of the DD. Upon registration of the property, the seller and you will have to visit the banks with all the original documents, including the latest registered sales deed. The banks will keep in their custody the complete set of original documents (the latest registered sale deed and including those with the seller) and hand over the check made by the DD / banker in the seller 's name. Once the property has been registered, the seller and you will have to visit the banks with all the original documents, including the most recent registered sale deed. The banks will retain in their custody the complete set of original documents (the latest registered sales deed and including those with the seller) and hand over the check made by the DD / banker in the seller 's name.