Modern home loan policies have made it simpler to purchase a property. More people are registering to become homeowners in India as a result of the implementation of PMAY (Pradhan Mantri Awas Yojana). Borrowers of loans can pay lower EMIs thanks to the credit linked subsidy scheme. 

Taking out a home loan to purchase a property has a lot of advantages. But you should be aware that not everyone qualifies for a loan. Banks investigate several technical and legal facets of the property before approving a loan. We have provided information about the numerous elements that the bank conducts verification before approving a house loan in this article.

Verification of the applicant

By gathering information about the borrower’s assets and income situation, the bank assessed the borrower’s ability to repay the loan. In order to assess the applicant’s intents and repayment capacity, the concerned officer also arranges a personal meeting with him or her. The officer may occasionally check the witnesses’ accounts.

Legal verification

Banks always prefer to approve a loan for a piece of property that has no outstanding legal issues. In order to investigate the legal elements of the property, it employs an experienced team. The bank’s team examines original property documents for this purpose, including sale deeds, title deeds, and certificates of no objection (NOCs).

When the bank’s legal team visits, the applicant must show the original property paperwork. Additionally, the loan applicant must provide all the documentation demonstrating that the builder has secured the necessary approvals to begin building on any house or apartment that is currently under construction. It is crucial to demonstrate that the builder has RERA certification.

If the loan applicant is purchasing a used property, he or she must submit the records of the property’s prior owners.

The legal team will send a report to the bank outlining grounds for approving or refusing the loan after reviewing the property’s records.

Technical verification

The banks appoint a team to assess the physical condition of the asset for which the loan is sought at this step. The examination of the condition and construction quality of the apartment or house by the technical experts. Assessment of the market value of the property is based these factors. This stage is crucial for the bank because it allows it to sell the property on the open market or at an auction in order to recoup the outstanding loan balance in the event that the borrower is unable to make their mortgage payments on time.

Before approving a mortgage loan, banks perform several crucial inspections. You shouldn’t be dismayed if the bank rejects your loan application. Instead, you ought to learn the reasons the application was turned down. This will assist you in determining whether the property is worthwhile for investment.