Home Loan and Disbursement Process
Home Loan and Disbursement Process
Let’s assume you have taken a home loan of ₹ lakh for 20 years. Your home loan has been approved at an interest rate of 11. Now, the bank, on the day of disbursement. What disbursement means is that in the bank’s system your home loan is approved, processed, and sent to the head office. From there, if any OTC comes, the definition of OTC is that the head office may ask you for some extra documents.
After disbursement, some additional documents may be requested which you will have to provide to the home loan company or bank. Then the further process starts. On the day of disbursement, an agreement is signed. In that agreement, all A to Z information regarding the financial relationship between you and the bank, along with all legal processes, is mentioned. So I would say you should जरूर read it first.
The most important thing I want to tell you is that you must read the agreement, and along with that, the sanction letter provided by the bank or NBFC company will contain around 8–10 basic details. You must read those carefully before signing.
Documents and Bank Verification Process
This is the process—once you read and understand everything, then you can sign and provide it to the bank. After signing the agreement, if the head office requires any documents within one or two days (it’s not necessary in every case). You will have to provide them to the bank or NBFC company.
After that, the bank will permit you to take a registry date. Along with that, they will ask for documents of the person from whom you are purchasing the property. That is, the seller who is selling the property, and you are purchasing it with bank finance.
Seller Documents and Registry Process
So, the bank asks for the seller’s PAN card, Aadhaar card, and a cancelled cheque. The reason they ask for these is to verify that on the day the cheque is given to the seller in the registrar office. The name printed and the account number match correctly and there is no mismatch.
So, you will have to provide the seller’s PAN card, Aadhaar card, and cancelled cheque. After you provide these two-three pieces of information to the bank, everything gets printed. After that, when the bank permits you, you can take the registry date.
Home Loan Charges and Insurance
On the registry date, when you go to the registrar office, there will be three people present—you, the seller who is selling the property, and the bank official.
First of all, let me tell you that when your home loan is getting disbursed, there are 2–4 things you must keep in mind. The first thing is the processing fee on your home loan. You must clearly know how much it is, because sometimes one thing is told and something else is written.
Commonly, it can range from 0.50% to 1%. This is based on my experience. Processing fees are charged on your home loan, and along with that, insurance is also included.
Understanding Insurance Details is Important
For example, let’s assume your home loan is ₹10 lakh. You must know whether the bank has insured the full ₹10 lakh or only ₹5 lakh or ₹4 lakh. This is very important.
Sometimes, if something unfortunate happens to the borrower. The nominee is told that only ₹5 lakh was secured and not the full ₹10 lakh.
So, the insurance premium although you have to pay it the bank adds it to your home loan or deducts it from the amount given to you.
Additional Charges and Conditions
But you must know these basic things whether insurance is included in your home loan or not, which company it is from, and it is very important to take that bond.
Along with that, in home loans generally prepayment and foreclosure charges are mostly nil. But still you must check whether the NBFC company you are taking the loan from has added any extra charges in the sanction letter or not.
What Happens on the Registry Day
Now let’s talk about when you have taken the registry date. On the day of registry, all three parties—you, the bank employee, and the seller—have to be present there.
There, the property gets registered in your name, and the seller receives the cheque amount approved by the bank after deducting processing fees, insurance, etc.
The registry gets completed in your name, and you receive a slip. The original property documents are submitted to the bank after 2–3 days or sometimes within a week.
When Does Interest Start
Now I am going to give you a bonus tip which is very important for you. Earlier, when the home loan was disbursed, the interest used to start from that day itself. But now, it is not like that.
The interest starts from the day your registry is done. That is, when the property is registered in your name and you officially become the owner.
So, if you feel any such mistake is happening or the bank is misguiding you by charging interest from the disbursement date, you must be careful.
You should clearly tell the bank that interest should not be charged from the disbursement date. It should start only from the day when the property is registered in your name.