Getting Loans For A House

by Jake Smith

Everyone is working hard enough and wishes to have a house of his own. There are few people who can really afford to buy their own homes. The number of people who buy house by taking loans from banks and financial institutions are increasing daily as the banks are lending loans at much cheaper rates than ever before. There are several financial institutions or banks which offer loans to people who are in search of house. The rate of interest charged by various banks are different and one may choose the bank or financial institution which is charging lesser rate of interest. One should do proper inquiry and research for this. Certain terms and conditions are laid down by these banks and financial institutions which are to be fulfilled before a person is assigned the loan. Submitting the pertinent documents is one of the terms of banks and should be fulfilled in order to get the loan. The main ground for asking these documents is to validate the identity of the person who wants the housing loan.

These banks and financial institutions offer tenure of three years, six years, twelve years or fifteen years. It all differs and depends on banks and financial institutions. The tenure may be selected by the person in need of loan.

Depending on the tenure, Equated Monthly Installments i.e. EMI are calculated and the person is informed about it. EMI and number of years are related to each other and as number of years increase, EMI decrease and visa versa. Banks are much concerned with EMI and their main goal is to get back the entire loan amount and that too along with interest.

It is very necessary for the person who wishes to buy house to first calculate the actual price of the house. Secondly the person should check that the property he is willing to buy is free from any legal obligations. In order to prove it is a better idea to get a No Objection Certificate. Loan is only granted after application form along with relevant documents is submitted in the bank. Income proof and residential address proof are most important documents which the banks or financial institutions generally ask for. Banks and financial institutions also verify the organization or company in which the person seeking loan is employed and even verify his residential address.

After all the conditions and requirements of bank are fulfilled bank issues a sanction letter which has all the details in it. These loan details include the actual loan amount, the rate of interest charged, tenure of the loan as well as the mode of repaying the loan amount. It is also the condition of the bank and financial institution to mortgage the original documents related to the property that is being purchased. The reason bank or financial institutions keep these documents are just for the security purpose. These documents stay in safe custody of the bank till the entire loan amount is completely repaid. These documents are also sent for scrutiny in the regular audit of the banks. After visiting the property and ensuring everything the loan is finally disbursed.

Thus, housing loans are just like a blessing for those who are dreaming to have self owned house. Housing loans helps in converting dreams into reality.