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4 Ways to Easily Finance Your New 1 BHK Flat

We’ve come a long way together in our journey of hunting your perfect home and breaking down the essential details.

I hope you have enjoyed the series so far. In this piece, we will talk of…

4 ways in which you can finance your new 1 BHK Flat in Pune
Important documents required during the loan process
Credit score and its significance
Home loan process in Pune

Without further ado, lets get started.

1.         4 Ways in which you can finance your home:

Even before the idea of buying a home crops up in your head, the whole aspect of getting the finances ready comes into picture, doesn’t it? You need to make the huge down payment (20% of the total amount) and here’s how you go about it.

Dissolve assets – If the need arises, consider selling some of your assets like old property/land, jewelry, vehicles etc to generate the down payment amount.
Take a loan – This is the most common means to finance your home. Visit different banks and ask them for their loan rates, terms and conditions and other details. Most properties across Pune are approved by certain banks. It is advisable to get a loan through them because they have already scrutinized the property for disputes and it saves you time to go through the entire ‘examination of papers’ process (discussed below) once again.
Take loan from family & friends – They are the first source who will help you in the hour of need.
Mutual Funds – If you’ve invested in mutual funds, considering surrendering them to get the money for the downpayment.

2.         Documents needed to get a home loan –

Completed loan application
Passport size photographs
Proof of identification: Electoral ID Card/Passport/Driving License/PAN card.
Proof of residence: Electoral ID Card / Passport / Electricity Bill / Telephone Bill.
Proof of business address (in case of non- salaried borrowers)
Statement of bank account for last six months
Salary slips for last 3 month
Personal Assets and Liabilities Statements in Bank’s standard format
TDS certificate- Form 16 or copy of IT Returns for last two financial years
Property Documents: Copy of agreement executed/Sales Deed.

3.         Credit Score – Owning a house is a dream come true but it comes with the burden of home loans and EMIs. When applying for a home loan, you should be aware of your CIBIL score – the 3 digit number that reflects the financial health of an individual, a reflection of one’s past credit history. CIBIL is the credit rating agency in India, the oldest and most widely used.

Here’s the significance of your CIBIL score on your home loan:

When you apply for a home loan, the loan providing agency does a due diligence about the property and the applicant. The first step involves looking at the Credit Score and Credit Report of an individual. A low Credit Score means outright rejection. In India, a score above 700 is considered the benchmark for loan sanction.

A score above 700 helps you…

– negotiate for better loan interest rates
– saving other charges levied by banks
– get a speedy loan sanction

Before you apply for your loan, get your credit report at least a year in advance. If your score is not good, you have still have time to take remedial action. In case of an oversight by CIBIL, you can write to them and ask them to generate a fresh report.

4.         Home loan process in Pune –

Collecting Property related Documents: Get all property related documents and sanctioned site plan from builder.
Legal Opinion: Go to your advocate or bank’s advocate and get the documents verified. For the advocate to give the final legal opinion he needs to view your Sales Agreement.
Property Valuation: Once the Legal valuation is done, go to a property Valuator and get your property valuated. You will get a valuator statement.
E-stamping: Most banks mandate the Sales agreement and Construction agreement to be stamped/franked  which can be done at any register office, post offices, Syndicate banks, selected registrar offices.
Submit the Application: Once you get the valuator statement and Legal opinion, go to your bank with a filled in application form along with the above mentioned loan documents. If you are looking to get your interiors done for your house, it is advisable to go for an interiors loan (max up to 3 lakhs) along with the home loan which will save you another 6000-7000 Rs as processing fee.
Wait: This can take 3 days or a month. Call up periodically to get updates. However, make sure that they inspect the property before getting the loan just for you to be double sure. Most banks do not disburse loans without due diligence.
Disbursement and registration: Once you get the Loan Sanction letter, send an email to the manager to disburse the amount and ask the builder to collect the DD from the bank directly. Your work at the bank is done. After this on the day of registration, while the builder gets the DD from the bank, you need to attain the duly stamped registration copy from the registrar office.

Now, it’s the time!! You are ready to go out and grab your dream home.