Those who have tried taking a housing loan from the bank would have experienced the pain of furnishing the information and documents to them. Most of the bankers don’t have a complete checklist of requirements and most of the Managers/executives don’t have a clear understanding of the loan process. So, I thought of listing out points which are not commonly told elsewhere.
Be prepared to get multiple lists of requirements – The executive or relationship manager won’t give you the complete list of documents and information required at one go. The moment you take a deep breath for having completed furnishing two bundles of documents, the third list will be at your desk. So, before availing the loan, be prepared to get multiple lists of requirements
Invariable delay – if the banker promises to disburse the loan in 10 days, kindly add 10 more days to it. Usually the promise to deliver ratio is 1:2. So, plan for registration of the property considering the delay in disbursal of the loan. Also try to exercise upmost patience.
Cheque Book – One of the items which the bankers will ask at the end (the day they disburse the loan) is 7 cheques/ 12 cheques (Note: it has to be CTS cheques)!. So, kindly check whether you have sufficient cheque leaves at your end. If not, order for one the day you apply for home loan.
Signature verification from the banker – if you are taking loan from banks/institutions other than your regular banker, they will ask for signature verification from the banker. So, at the time of applying for loan, ask the lender, the list of things which you have to get it from your banker. If not, your loan disbursal will get delayed.
Personal verification – As soon as you apply for a loan, you will start getting calls from different people. One fellow will insist to talk with you at office (to verify whether you are working at the same office). Another fellow will insist to visit home (to verify whether you are living in the same premises) Yet another fellow will call (telephone verification) and ask some irrelevant and irritating questions (such as how many kids you have, what they are doing, how many cars you have, how long you are working in the same company, etc). If you feel that the verification is over, you will get a call stating that ‘he wants to inspect the property’. By this time, you would have lost your patience. But the bankers’ idea is to test your patience, so one more person will call stating ‘he wants to meet the seller of the property’
Seller’s credentials – The banker will ask for a copy of address proof, ID proof, bank passbook, PAN Card and what not of the seller. But the banker won’t tell these things at the time of filing application. He will ask only when you would have lost your cool.
DD will come after submitting the original documents – finally they won’t handover the DD/payment to you. They will release the payment only after the registration is done and original documents are handed over to them.
Processing Fee, Interest Rate and Pre-closure penalty – The banker will ask so much information as if he is going to buy you for a price! (Except asking you to visit their office daily and sign in their attendance register, they will ask everything).But they won’t reveal the important information about processing fee, interest rate etc. So, before singing the application, ask the banker to give a proposal or email regarding the total hidden charges (processing fee, photocopy fee, courier charges, etc) rate of interest and pre-closure penalty. Though RBI has asked the bankers not to collect pre-closure penalty, it is better to get it in writing (as part of the agreement).
Insurance – After a long wait, you will reach a day of getting the loan disbursed. Suddenly, a day before the disbursement, one character will emerge stating ‘Insurance on home loan’. So, check before you avail the loan from the bank, whether taking insurance is mandatory. If it is optional, you can check the pros and cons and then take a decision.
Take Off on the day you sign the documents – If you want peace of mind, the day you sign the loan documents with the bank, please take leave from your work. Otherwise, you will get high blood pressure for sure!
The above points holds good if you are buying a property from the market such as plot, used apartment, existing house, etc. The above information is true in case of nationalized or private bankers (they have only one thing in common – seeking information, information and information from the borrowers). The process may be simpler in case of new apartment’s purchases as the builder/developers would have done the leg work on behalf of you.
Larger the loan amount lesser the trouble – If you are a middle class citizen of this country, you will be questioned more. If the loan amount is in a few Crores, the process is simpler. I am saying this because you can see crores of rupees being cheated to the banks by big borrowers. So, I feel the rules are for middle class small borrowers and relaxed rules for upper and rich class.