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Property Panga - Helping you solve your property problems in India
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How to obtain finances? |
PropertyPanga.com helps you with your property problems in India. While getting
a home loan has become an easier process since the last few years, one need to go
through certain formalities before the loan is sanctioned.
Here is what you need to do before you have that `precious cheque in your hands.
The process begins with the filling of the mandatory application form.
While the look of a form may differ from one housing finance company (financial
institution) to another , nearly 80 percent of the information they require is similar
in nature.
You need to provide your personal & professional information, details of your
financial assets & liabilities & the details of the property (if finalized),
including the estimated cost & the means if financing the same. When you submit
the application form, each financial institution will ask for documents which will
be required to establish your income.
Documents you have to provide:
a. Last three year Income Tax return (along with copies of computation of income/annual
account, if any), Form 16/Form 16A.
b. Last three month salary slips.
c. Copies of the last 12 months statement of all your active financial institutions
account in which your salary/business income details are reflected, etc.
d. School leaving certificate/driving license/passport/ration card/PAN card/Election
Commission's card/etc.
e. Proof that you are staying at your current address.
f. Proof of your investments so that it helps the financial institution gauge your
ability to pay for the down payment as well as your saving habit.
Once the basic documentation is received by the financial institution, some may
want to meet you before sanctioning the loan. And if they do so, carry all the original
documents pertaining to the information you have provided.
Then the financial institution swings into action & sends its representatives
to validate every bit of information you have given. These could include checking
the property details, etc.
Once the information has been verified they do a credit appraisal & they give
you an offer letter, which you need to accept by signing a duplicate. You will also
need to give the financial institution the entire set of original document pertaining
to your property so that they can keep them as security for the loan amount given
to you. The document will remain in the financial institution's custody until the
loan is fully repaid.
The documents normally include:
a. The title document of your seller, which prove the sellers title, including the
chain of title documents if he is not the first owner.
b. No-objection Certificates(NOCs) from the legal owner such as Cooperative Housing
Societies, statutory development authorities, the lessor of the land ? in the case
of leasehold land, etc. NOCs are not required where the property is situated on
freehold land &the entire land is being transferred with the structure.
The financial institution?s also use there own legal &technical terms that cross-check
the information, as well as the quality of construction (unless they already know
the builder & have pre-approved the projects). Every financial institution conducts
a site visit to your property to verify the following-
In case of under construction property:
a. Stage of construction is the as same as that mentioned in the payment notice
given to you by the builder.
b. Quality of construction.
c. Satisfactory progress of work.
d. Layout of flats & area of property is within permissions granted by the govering
authority.
e. The builder has the requisite certificate to start construction at the site.
f. Valuation of the property in relation to order deals in the surrounding areas.
In case of ready/resale construction:
a. External/internal maintenance of the property.
b. The age of the building.
c. Will the building last the loan tenure? This has a direct bearing on your loan
eligibility since the loan tenure will be restricted to the maximum age of the property
as decided by the financial institution engineer & this willmajorly impact your
loan eligibility.
d. Quality of construction.
e. Surrounding area (development).
f. Whether the builder has received requisite certificates for handling over possession
of the flat.
g. There is no existing line or mortgage on the property.
h. Valuation of the property in relation to other deals in the surrounding areas.
After legal & technical/valuation checks, the draft documents, as clear by the
lawyer, need to be finalized & signed. Stamping & registration also need
to be done. Also if any NOCs are pending, these need to be obtained in the format
approved by the financial institution lawyer.
Once the documentation & your ability to repay the loans have been confirmed,
the financial institution will sign a home loan agreement with you. Here you need
to be post-dated cheques for the first 36 months or more (depend on the agreed mode
of repayment). And now you can actually hold cheques in your hands. The cheque will
be in the name of reseller (for resale flats, builder, society or the development
authorities. In the case of property under construction, loans are disbursed on
the bases of the stage of construction of the property. This would mean that the
disbursement either be full & final ( in the case of resale & ready possession
properties) or part disbursement (in the case under construction properties). Finally,
once the financial institutions hands over the pay order to you. You in turn are
expected to the reseller or the builder. You should get the receipt from them for
the payment. This receipt will become a part of your mortgage documentation, &
part hence has to be handed over to the financial institution
Contact Us for a no obligation assesment of your problem.
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| 'Panga' is a Hindi word that means problem in English.
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