How Does Home Loan Verification Process Works in India?

17 Jun 2022

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A home loan provides easy and affordable financing for you to purchase or construct the home of your dreams. The good news is that home loan interest rates are currently at an all-time low. Thus, if you are planning to apply for a home loan, now might be the right time to do so. However, do remember that your application process does not end after you submit the documents required for home loan financing. The lender must also verify your loan request before sanctioning the requested amount. To help you gain a better understanding, here is everything you need to know about the home loan verification process.

The home loan verification process

The home loan verification process is one of the most crucial stages of the loan approval process. After you have submitted the documents required for a home loan application, the lender verifies the authenticity of the information by conducting various background checks. This also includes the legal and technical verification of property. The lender will only sanction the loan if all the documents submitted by you are correct.

The lender will also assess your creditworthiness by understanding your qualifications, monthly and yearly income, previous transactions with the lender, work profile, and your ability to repay the home loan. Furthermore, the lender will also check if the property you wish to buy is stuck in any legal disputes and inspect whether it has good structural health. For the property document verification, the lender will send a team of experts, mostly lawyers, to check the ownership documents of the property such as, NOCs, and title deeds, among others. For the technical verification of the property, the lender would have to review the property’s physical health, its market value, and various other building specifications. To successfully verify your home loan, the property you wish to buy must be constructed in accordance with all prevailing government-specified norms.

What are the documents required for the home loan verification process?

The list of documents required for the home loan application process usually varies depending on the type of property you wish to purchase and the lender from whom you wish to take the loan. Hence, it is better to confer with the loan provider about the documents required for the loan approval before starting your application process.

Below is the indicative list of documents-

  • Loan application form
  • An identity proof, such as Aadhaar card, or passport
  • Your address proof, such as a utilities bill that is not more than three months old, or passport or Aadhaar card
  • Your KYC documents such as PAN card and Aadhaar card
  • Bank account statements of the last six months
  • Property documents (detailed list provided below)
  • Passport size photographs of all applicants and guarantors, if any.
  • Balance sheets and profit & loss accounts of the business/profession along with copies of individual income-tax returns for the last three years, certified by a chartered accountant. (for self-employed applicants)
  • Latest salary slip (for 3 months) / statement showing all deductions in case of salaried applicants

Property documents required for the home loan verification process

  • The original property sale agreement
  • Receipts of payment of the property tax
  • Certificate of possession
  • Permission letter from the concerned authorities
  • Original NOC issued under the ULC Act 1976
  • Building plan or floor plan of the property
  • Non-Agricultural permission or order
  • Detailed estimation of the construction cost
  • If you are purchasing a plot, you would need to submit a declaration specifying the date by which you will construct a house
  • Allotment letter issued by the society, builder, or the housing board

What is the process of getting your home loan verified?

Here are the steps involved in the process of getting your home loan verified and sanctioned:

• Step 1 – Compile documents

Compile all the required documents and procure the loan application form from the lender.

• Step 2 - Application

Fill out the home loan application form and submit the same along with all the required documents to the lender.

• Step 3 – Submission of paperwork and start of verification

Once you submit all the documents, the lender will perform background verification and analyse your credit history. The lender would also have to run legal and technical checks on the property you wish to purchase.

• Step 4 – Discussion of terms and conditions

If all the information you provide checks out and you are deemed eligible to procure the home loan of your preferred amount, the lender will contact you to discuss the terms and conditions of the loan.

• Step 5 - Loan agreement

Once you and the bank have finalised the terms and conditions of the loan, the lender will provide you with a format to draw up a loan agreement. Do remember to follow the state law when creating the loan agreement. Also, ensure that you read the agreement terms and conditions carefully before signing.

• Step 6 – Down payment

Once your home loan has been approved and verified, you will be required to make the down payment that the lender requires.

• Step 7 – Disbursal of funds

After the lender receives your down payment, depending on the terms and conditions of the loan, the loan amount is disbursed. The disbursed amount depends on the construction stage of the property. Implying, if the property is fully constructed, the lender would most likely disburse the whole amount in one go. However, if the property is partially constructed, the lender would also disburse only a portion of the total loan amount.

The process of your home loan application and verification now stands completed with the disbursal of the funds.

Home loans made easy with Bank of Baroda

The Bank of Baroda home loan verification process is simple and seamless. You can visit Bank of Baroda’s website and get all the details you need to successfully start and complete your home loan application process. The website has been intuitively designed, thus making it extremely easy even for first-time loan applicants to independently complete the home loan application process.

Furthermore, you can also download the loan application forms directly from the Bank of Baroda’s website. You can also make use of the home loan EMI calculator present on the website to calculate your monthly EMIs before you even start your loan application process. Bank of Baroda is transparent in its lending processes and does not levy any hidden charges on its loans.

So, go ahead and explore our range of home loans and pick the one that suits your needs the best. Apart from a regular home loan, we also offer other forms of financing such as a home loan takeover scheme, top up loan, and home improvement loan.

If you need any more assistance, do call us up on 1800 258 44 55 or drop in at a Bank of Baroda branch nearest to you.

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    The contents of this article/infographic/picture/video are meant solely for information purposes and do not necessarily reflect the views of Bank of Baroda. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Bank of Baroda and/ or its Affiliates and its subsidiaries make no representation as to the accuracy; completeness or reliability of any information contained herein or otherwise provided and hereby disclaim any liability with regard to the same. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Bank of Baroda or its affiliates to any licensing or registration requirements. Bank of Baroda shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

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Benefits of Personal Loan To Raise Funds

There are times in everyone’s life when there is a sudden need for money. The immediate choice is generally to use a credit card or to borrow money from friends or family members.
With net-banking now in place and more lenders chasing fewer borrowers, raising money through other sources is now possible at a faster pace.
Gold loans are normally a preferred and cheaper source of the loan, where banks and gold loan companies process the papers fast to give the borrowers the money he or she needs. However, personal loan are now being offered at a faster speed too. There are lenders who advertise that they will disburse the loan within a day. 
Under such circumstances, it is always better to go in for a personal loan rather than using your credit card to meet any emergency need. Firstly, because the personal loan is far cheaper than any credit card loan and secondly because the personal loan can be of a bigger size than what the credit card can offer.
But before one takes a personal loan it is important to have a good CIBIL score. With a CIBIL score of over 750, a person can be choosey in picking up the personal loan with the lowest interest rates. A person with a lower score may still get a personal loan but the interest rates may be higher.
The biggest advantage of a personal loan from the point of view of the borrower is that it is an unsecured loan. The borrower need not pledge or mortgage any of his assets to raise funds.
For an entrepreneur, a personal loan can act as a stop-gap arrangement till he is able to raise money from other sources to meet his urgent business requirements.
Like any loans, personal loans need to be repaid periodically in equated monthly installments (EMI). These loans can run from a short tenure of one year to a four-years loan. These days there are lenders who offer personal loans for a period of seven years also.
While taking a personal loan is easy, it should be taken only in case of emergency. Personal loans, being unsecured are costly. It would be foolish to buy an asset with a personal loan, especially when there are financial products available these days to buy a mobile or any other household equipment.
One should avoid using personal loans to repay loans that are cheaper in cost. But they can be used to repay higher cost loans like credit card bills or something similar.
If one is using personal loan to meet the operating expenses of the house then he or she is falling in a debt trap. One loan will lead to another and before the person understands it, he would have fallen in a debt trap. Rather than using the personal loan as a saviour to come out of the debt trap the person would have fallen in it using personal loans. Personal loans should be used only for intermittent emergencies.

Documents Required for Personal Loan

A personal loan is a friend in need when it comes to emergency cash requirements as it helps you meet your immediate financial needs. All sorts of government and private banks in India give personal loan facilities if you have correct documents ready.

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