Home Loan Disbursement Process

By Author: anjitha
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Owning a home is a dream for most middle-class families, be it an apartment or a row house built over a plot of land. However, building or purchasing a home can be a difficult process, as you jump starting with one designer then onto the next, sorting out the best offers satisfying every one of your prerequisites. Regardless of whether you observe the ideal property, its costly rates might blow your financial plan. Here is the role of home loan. The process to apply for a home loan in India involves 3 steps, application and approval, sanction and disbursement.
Once you apply for a home loan, the lender reviews and approves your application. The loan sanction limit depends on various home loan eligibility factors such as your age, income, professional qualification, repayment capability, etc. What happens next? How is the home loan disbursed?

Steps Involved in Home Loan Disbursement Process

A financial institution or bank will disburse the loan amount on completion of the following stages:

Property evaluation and document submission: ...
... When the loan is sanctioned, a professional appointed by the bank will visit the property for assessment. If the property is already constructed, property details and its surrounding regions will be reviewed. For under-construction properties, its present stages and quality are noted. The specialist then submits that report to the bank. After the evaluation, the applicant has to submit the original property documents, like the Title deed, Allotment Letter, stamped Agreement of Sale, and the NOC. Lender will examine these documents and these documents will remain with the lender until the loan is fully repaid.

Submit the down payment proof: As per guidelines, lenders provide 70% and 90% of the cost of property. You have to pay the balance amount as down payment. If you have made the down payment, you'll be expected to present a proof of payment to the bank, to continue with the subsequent stage of the Home Loan process.

Request for disbursement: Subsequent to giving the down payment and presenting the proof, the disbursement of the loan will be authorized solely after you present every one of the required documents. You can then make your request for loan disbursement either offline or online. If it is offline, you need to visit the office/branch of the housing finance company. Making your disbursement request online is easier and convenient. After login to the website of your finance company, click on the ‘disbursement request’ tab. For an under construction property, the funds will be released in parts, adhering to the stages of construction. When a builder sends the notification to the buyer with the details of construction, a demand letter is sent. Based on the demand letter, the lender will release the funds in proportion to the progress of construction.