What is the procedure of Home loan?

Everyone dreams to have his own house. We save money or earn a lot, so that, we can build a dream home. We buy a good Plot and start thinking how to construct a beautiful home. Many of us are of low income group and are not able to have our own home. But you should not be anxious, Government and Banks help you construct your own home. You can apply for Home Loan to any nationalized Bank. Government of India has provided you special facilities of getting Home Loan at lowest interest rates under Pradhanmantri Awas Yojna-Credit Linked Subsidy Scheme. In this scheme borrower can avail the facility of subsidy on interest. which results into lower installment amount and lower interest rate. This scheme has been launched for economically weaker sections, low income groups and middle income groups of society.

One of the primary conditions of the scheme is that you must not own Pucca house either in the name you or your family members which includes you, your wife/husband and children.

Generally bank offers 8.67% interest rate on loan amount. But under this scheme banks provide subsidy on interest which may be a maximum of 2.67 lac and this subsidy is credited to your loan account at the end you complete repaying loan account with all interests. You can not avail such facilities in other loan schemes.

How to get this loan from bank.

1. You have to visit nearest branch of any bank and get Home Loan application form. Before submission of application you must ensure that the piece of land at which you desire to construct home should be either in your name or in your spouse or both. Bank ensures the ownership of land, so that, its market value could be ascertained and if you fail repaying loan amount and becomes bankrupt, bank could recover loan amount by auctioning of the house.
2. You must have original copy of Deed of the land in your custody.  Bank takes its custody before sanctioning loan and keeps it in its possession till the end of repayment.
3. You must have certified copy of Mutation issued by circle office of the area(Original copy of the document needs to be attached with application form). This document too is taken by bank.
4. You must have original copy of Land Possession Certificate.
5. You must have original copy of current revenue receipt issued by Circle Office.
6. You must have layout of the said land sanctioned and passed by Nagar Parishad if the land lies in town area. But if in village area the layout should be counter signed by Mukhia( Head of Gram Panchayat) only.
   
7. You must bear a copy of estimate of entire plan which is prepared by a engineer authorized by Bank. This estimate cost and plan should be in correlation.
8. Legal opinion is prepared by authorized Legal Adviser of the bank. This is meant for ascertaining ownership of the said Land.
9. The evaluation of the said land with MVR and market value is calculated by authorized agent of the bank. He visits the land for physical verification and then reports geo position of the land. He takes pictures of the land. He records longitude and latitude and collect information regarding all sides of the post.
10. If you are a government employee, you must have attach a copy of your Salary Slip.
11. A copy of income tax return or Form-16 is also needed so that your income within tax limits could be ascertained.
12. It is bank's discretion to demand disclosure of details of your property in all forms like share, debenture, gold, ornaments, LIC, and other movable or immovable property.
13. Bank also wants to know about net-worth of invested amount in other savings scheme.
14. You must disclose the name of Nominee who will repay the loan amount in your absence.

After some procedure is followed up, bank make you fill up a affidavit. Then after following some other necessary steps all above said documents are held in possession of bank and first installment of loan is released in your bank account.

Pradhanmantri Awas Yojna-Credit Linked Subsidy Scheme comes in effect in the last when loan amount is disbursed. Bank authority send your details to National Housing Bank which after necessary checks approves the subsidy and sends subsidy directly to the loan account of the borrower.

I hope this information will be very useful to all of you.