Today everyone wishes to possess a self owned house. Some people can afford to buy house on their own but majority of people prefer taking loans either from banks or financial institutions. There are many banks and financial institutions that are offering easy loans for purchasing houses and even construction of same. One may choose a bank or any financial institution on the basis of the banks charging lesser rate of interest. There are certain terms and conditions which should be followed before assigning the loan to a person. The banks or financial institutions shall also ask the person to submit some documents which are necessary in order to avail such loan. The basic reason for asking these documents is to authenticate the identity of the person who is in need of a loan.
There are various options for tenure of the loan like three years, five years, ten years and so on. These categories differ from one bank to the other. One may choose any of these categories which is suitable to that person.
Depending on these categories the EMI’s i.e. Equitable monthly Installments are calculated and are explained to the borrower. It is a fact that as the number of years increase, EMI shall decrease. The amount which a person has to pay to the bank on monthly basis further decreases. The lesser number of years, more is the EMI. The only thing any bank is actually concerned is that the borrower should be able to repay the loan amount along with interest in time.
The person who wishes to buy a house on loan should first calculate the price of the property. The other important thing is to see whether the property which the person is willing to buy has any other legal obligations which are to be fulfilled. It is always better to get a No dues certificate in order to prove that the property is free from any encumbrances. Bank or the financial institution before granting any housing loan requires the borrower in need of housing loan to submit application form along with other documents that are relevant and involve the financial repaying capacity of the borrower. These documents include income proof and residential address proof. Banks also check the residential address of the person as well as the company or organization in which the person is employed.
Once all the terms and conditions of the bank and financial institution are fulfilled, bank issues a sanction letter. This sanction letter has all the necessary details like the amount of the loan sanctioned, the interest charged on loan amount, tenure of the loan and the mode of payment. Bank or financial institution also requires that all the relevant original documents regarding the property which is to be purchased should be handed over to the bank. Bank or financial institutions keep these relevant documents as a part of security. One should not worry about these documents as documents are in the safe custody of the bank and are only returned to the person when the whole loan amount is repaid. These documents are scrutinized and after visiting the property and ensuring each and every thing the loan is disbursed.
The housing loans is a blessing for those who are in need of house and cannot afford to buy on own.
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