Is your home loan final disbursement lower than expected? Here’s why!
If you’re considering buying a home, chances are, you’re also considering a home loan. Finding the best kind of home loan can be quite the challenge, especially if you’re a first-timer.
The Home Loan ProcessAs a lot of people who have taken home loans know very well, the disbursement amount is often not the same as the amount agreed upon. There are a lot of reasons behind this, and it is something one should be prepared for.
Two very important aspects of a typical home loan are:
- An assessment of the applicant’s profile
- An evaluation of the property in question
The applicant must first submit personal documents such as identity and address proofs, and even employment details along with a thorough summary of their income. The applicant is then checked and approved based on their credit score. Using this information, a repayment capacity is agreed upon and accordingly, a home loan limit is set. Bajaj Finserv can help you get instant approval for a house loan with reasonable interest rates and 0.8% processing charges.
A sanction letter is then issued which includes information such as the limit of the home loan, the repayment tenure, the EMI amount, the interest rate applicable, etc. The sanction letter carries a date limit, before which the request for disbursement should be made. If this request is not made in time, the entire process will have to be repeated.
The Issues with Disbursement Once a property is finalized, the applicant has to present the necessary property documents to avail of the disbursement. These documents differ, depending upon the seller of the property. The lender then has the responsibility to carry out the final physical inspection of the property. They evaluate the cost of the property and decide upon a certain loan amount. This depends completely upon the loan-to-value ratio of the lender, which varies across different institutions.
Problems, however, can occur when the lender’s evaluation of a property returns a lower value than its sale price. This can lead to the lender disbursing a loan on the basis of his loan-to-value ratio, which may or may not match the amount the buyer requires. Since lenders only sanction loans for up to up to 80% of the property value, this can be a real problem. This occurs more often when resale properties are purchased.
Also, remember that lenders deduct a certain percentage of your loan towards processing and administration fees. Bajaj Finserv offers you a hassle-free path to home finance with their online Home Loan applications.