Generally one needs home loan to purchase a house of his/her desire. When properties were not that costly, one could have arranged to purchase a property by himself, but now, when cost of properties are well beyond the reach of a common salaried person it has become essential to take a home loan to arrange for your property. When knows that its essential to take a home loan, one must prepare beforehand. If you prepare and make a definite plan before procuring a home loan it will become very easy to get the home loan. Banks not only provide home loan for purchasing a new house but also for extension, make over of old house and to purchase a land too. Banks also provide bridge loan, that is if you want to purchase a new house by selling the present house and after selling you are not able to have possession of the new property then to have accommodation for that period loans are provided.

What banks ask one to provide

If you need a home loan, you must act according to a plan. A person desirous of getting a home loan must provide the amount of home loan needed, tenure for which home loan is needed and related documents to the bank. These documents include complete profile of the home loan applicant that must have the details of current and permanent residential address, age, family background and such information needed by the bank. In addition to it one must provide the source and details of income earned in a year, which becomes the basis for calculating the amount of home loan for which the applicant is eligible. One should provide details of current economic condition, salary statements, businessman should provide business profile and statement of accounts and audit, bank statement of last 6 months, copy form 16 of salaried persons for last 3 years and copy of income tax return filed for last 3 years.

For proof of identification, one must provide a copy of either of the following viz. passport/PAN card/voter ID card/driving license etc. For residential address proof one must provide either of the following viz. copy of latest telephone bill/copy of latest electricity bill/copy of latest cell phone bill/copy of latest insurance premium receipt. For age proof one must provide either of the following viz. attested copy of birth certificate/copy of school or college leaving certificate/address proof provided by the current employer.

Scrutiny by banks

After getting the application, banks start a process of scrutiny of the documents for ascertaining that the details provided are true. For it a bank might appoint an outside agency. After confirming the validity of documents, the bank officer who is responsible for issuing home loan decides the amount of home loan for which the applicant is eligible. After the bank approves home loan, applicant has to submit the original documents of the property purchased, then a memorandum of home loan is signed between the bank and the applicant. Now cheque for home loan amount is issued to the applicant. One might have to wait for a period of 7 to 20 days depending upon the work culture of the bank.

What an applicant should seek

Before getting the home loan an applicant must know rate of interest at which bank is providing the home loan, whether it is fixed or floating, if there is any other condition, any processing fees, late payment charges if any and any penalties on prepayment of home loan. One must ensure that there are no hidden charges involved.

If one follows the above guidelines he/she will easily be able to procure the home loan.