A home loan is a long-term legal contract between a customer (home loan applicant) and the bank. Therefore, it is very important that the home loan applicant is fully aware of all the legal terms and conditions involved in processing a home loan.
A home loan applicant can face various difficulties, including certain legal issues in the processing of a home loan. You must be very careful and have a good understanding of all the legal aspects of mortgage loan processing. The following tips will greatly help you educate yourself in this regard and get a hassle-free home loan.
1. The home loan process begins with documentation. Documents belonging to a property are of great value and play a key role in completing the process. Therefore, a home loan applicant must be very careful when submitting documents to the bank. Never send false or unclear documents that could create confusion or mislead banks; banks have every right to take legal action against those who deceive them.
2. The details you provide on the application form must not include any discrepancies. Banks make a careful study of these details and, if they find any discrepancies, it is certain that your application will be rejected without prior notice.
3. Keep all your receipts for the amount paid on credit card bills, as banks can request receipts for payments once the details are in CIBIL.
4. A panel of advocates will review the documents submitted by the home loan applicant. They will obtain the search reports from the office of the corresponding sub-registry to know the details of the deeds and the suppliers corresponding to that specific property. If they find any discrepancies in the documents, the banks will ask the customer or supplier for clarification or other supporting documents.
5. The property that the mortgage loan applicant intends to acquire will be evaluated by technical appraisers, and if one finds any deviations in the property, the client must submit additional documents to support the deviations.
6. Once the entire process is finished, the provider must verify all its original documents with the bank official before disbursement of the loan, and the client must present the last Certificate of Lien (EC) that records all transactions of the property in original.
7. The client (mortgage loan applicant) has to sign all legal documents and Mortgage Loan Contracts regarding the disbursement of the loan, and the property will be mortgaged to the bank until the full loan amount is repaid after the Registration of the property. Clients are advised to read the copy of the agreement carefully before signing it.
8. If the client defaults on the loan, banks can appoint agents to collect easy monthly installments (EMI) from the client, and he / she has to cooperate with them.
9. If the client defaults, the bank can repay the property to recover the loan amount; and once this happens, it will be added to the CIBIL (Credit Information Bureau of India Ltd) list of defaulters.
Finally, it is advisable to take out the least amount of loan possible to save the interest paid on the loan. Also, be on time with your loan repayments to maintain a good credit history.