Once you have zeroed down on the property that you want to buy and the lender has approved the loan application, you will get an offer letter. You must sign the letter and agree to the terms and conditions mentioned therein to proceed further with the disbursal. There are a few steps involved in the disbursement, which are explained below.
First and foremost, there are two types of loan disbursement – partial disbursement and full disbursement. If you have applied for a home construction loan, the lender will not disburse the amount in full upfront. The lender will release only a partial amount initially to start the construction process and gradually release the remaining amount in smaller parts as the construction progresses.
If you have applied for a home loan for a ready to move in property, after you submit the copy of the offer letter, the loan officer will inform you about the documents to be submitted for home loan disbursement. After you have submitted the necessary documents such as the sales deed, the No Objection Certificate, etc, the lender will appoint a legal expert to verify its authenticity. Based on the report of the expert, the lender may ask for a few more documents for further clarity.
Once the lender receives a go-ahead from the legal advisor about the completion of the verification of the personal financial and property-related documents, the loan officer will give you the details of the down payment.
Apart from the property documents, the loan officer may ask you to execute transaction documents like credit facility application form a few other documents required for the disbursement of the loan. Finally, the lender will release the sanctioned amount in the favour of the builder or the developer of the property or the seller in a single or more than one instalment as per the conditions mentioned in the sanction letter.
You must know that in some cases, the lender may ask you to pay for the legal verification of the property. But, most lenders cover the cost in the processing fee. Your repayment period begins as soon as the full amount is released. In case, if the amount is not disbursed in full, you may have to pay a simple interest on the amount disbursed.
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The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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