Housing Finance Process:

Housing Finance Process:
In this scenario of rising credit off take in the home advances sector this project looks at the processes involved in the processing of housing loans which banks perform.
The stages involved from applying to disbursement of housing loan is summarized as below.
Step 1: Requirement analysis
Step 2: Application form
Step 3: Bank’s Field Investigation
Step 4: Credit appraisal by the Bank and loan sanction
Step 5: Offer Letter
Step 6: Submission of legal documents & legal check
Step 7: Technical / Valuation check
Step 8: Valuation
Step 9: Registration of the Property Documents
Step 10: Signing of Agreements and submitting post dated cheques
Step 11: Disbursement
In a bank the home advances department comprises of a Branch manager, clerk and an agricultural field officer

When the borrower approaches the bank, the bank does an assessment of the requirements, namely the purpose of the loan and the amount of loan .The purpose in most cases may vary from purchasing a flat, constructing a house or even renovation or even buying a piece of land. The amount sanctioned depends on the purpose and is defined as thus Loan Amount
· Up to Rs.100 lakhs for the purchase of a house.
· Up to Rs.5 lakhs for renovation/ up gradation.
After the requirements are assessed the customer is asked to fill an application form Filling up the application form is the first step towards the home loan cheque and to a great extend includes basically personal and professional information, details of the borrowers financial assets and liabilities and the details of the property (if finalized) including the estimated cost and the means of financing the same.

Documents to be submitted
Age, address and identification proof: Copy of borrower’s school leaving certificate/Driving license/Passport/ ration card/ PAN card/ Election Commission’s card / Domicile certificate.
Proof of income and employment details: These will need to be backed up by proof such as copies of last three years’ Income Tax returns (along with copies of Computation of Income/Annual accounts, if any), Form 16/Form 16A, last three months salary slips, copies of the last 6 months’ statements of all borrower’s active Bank accounts in which borrower’s salary/business income details are reflected, etc.
Salaried employees:
Latest salary slip with all deductions
Self-employed persons:
Certified computation of income for past two years Certified Profit and Loss Account and Balance Sheet

Property Documents : Documents includes stamped and registered sale agreement / agreement for sale, builder’s NOC, Occupation Certificate from local self government, all Mother documents, chain documents, Society NOC, Title clearance certificate from panel advocate, valuation report, Indemnity bond, Share certificate, Layout plans, location plan, copy of will if seconds sale, release deed with all the legal heirs signature, etc.
Processing Fee:
Along with the application form and the credit documents, Banks ask for a processing fee. This fee varies from Bank to Bank, but is usually around 0.25% to 0.50% of the total loan amount.

Field Investigation: Checking the credentials
The bank checks all borrower’s information including borrower’s existing residential address, borrower’s place of employment, employer credentials (if the borrower works for a small organization), residence and work telephone numbers. Representatives are sent to the borrower’s workplace or residence to verify the details.

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