PROPGUIDE − A Complete Property Guide

What Do Banks Owe You When Disbursing A Home Loan?

What Do Banks Owe You When Disbursing A Home Loan?
India Mortgage Guarantee Corporation is urging the Reserve Bank of India (RBI) to bring down the loan-to-value ratio to 90 per cent. (PicServer)

After the completion of all the formalities, you home loan application has been approved by your bank. Now, you are waiting for the loan amount to be disbursed to you.

In the meantime, do keep the things mentioned below in mind:

  • Your bank is going to charge you the interest on the loan from the date the cheque was issued, not from the date when it was handed over to you.
  • In almost all the cases, banks issue the cheque in the name of the developer or reseller. It is only in exceptional cases that banks agree to issue it in your name. For that, the buyer has to give a written proof that the downpayment made had been more than the 20 per cent of the total value. It is an accepted norm that banks generally fund only 80 per cent of the value of a deal.
  • For an under-construction property, the bank will disburse the loan amount in a phased manner, depending on the progress of the construction and will charge you only simple interest till the final amount is disbursed. The EMI payments will start only after the final disbursal is made. In case of a resale property, banks issue the total amount in one go.

Banks also have to provide borrowers a copy of loan documents signed by their authorised signatories after sanctioning the loan amount, a responsibility which most of them might give a miss unless borrowers keep pursuing them. As a borrower, you have to make sure that you obtain the photocopies all loan-related documents.

Meanwhile, also keep in mind that

  • Complete transparency is mandatory on the bank's part, according to the Reserve Bank of India, in providing you with the information on interest rates and other charges that impact your repayment towards the bank.
  • Banks have to provide you authenticated copies of all the loan documents executed by you at their cost, along with a copy each of all enclosures quoted in the loan document on request.
  • Without citing a valid reason, a bank cannot reject your loan application.

Tags: home loan, resale property, banks, EMI, equated monthly installment, propguide, Money, Borrower, Underconstruction Property, Loan Disbursal

#Budget2017: Affordable Housing To Get Infrastructure Status

After Finance Minister Arun Jaitley presented the Union Budget 2017-18, Prime Minister Narendra Modi said the housing sector stood to gain immensely from the new announcements.

February 01 2017

+ Click Here To Read This Article

Looking For A Budget House? You Can Bank On EPFO

Retirement fund body EPFO plans to finance low-cost housing for its 50 million subscribers.

March 16 2017

+ Click Here To Read This Article

What Do Banks Try To Gauge From My Bank Account Statement?

Among other documents, banks ask for your account statements before they commit to granting you a home loan. Your bank account statement helps financial institutions understand your monetary position, based on which banks may or may not decide to grant you a loan.

March 02 2017

+ Click Here To Read This Article

Are Home Loan And Mortgage Loan Different?

Home loans have a pre-set nature — it is provided for the purchase of a property. Fund acquired through a mortgage loan, on the other hand, can be used for other purposes, too.

February 21 2017

+ Click Here To Read This Article

5 Things Prospective Home Buyers Must Do

Right when you decide on a timeline within which you would want to become a property owner, you have to start  on many small and big aspects of your life. There are many dos and donts that prospective home buyers have to follow to ensure a smooth property transaction.  

February 17 2017

+ Click Here To Read This Article

An Explainer: Foreclosure

PropGuide simplifies complex real estate jargons for you.

February 15 2017

+ Click Here To Read This Article

Paying Home Loan? This Is What You Should Not Do  

As long as you are in the process of re-paying your home loan, there are certain things you must avoid doing as a responsible borrower.

January 24 2017

+ Click Here To Read This Article

Are You Ready To Take A Home Loan?

Availing of a home loan is a long-term commitment. In most cases, it is also the biggest investment of one’s lifetime. So, before you sign the loan documents, there are several points for you to consider.

January 23 2017

+ Click Here To Read This Article

Here are today’s top news stories from the real estate sector.

If RERA were to start its surveillance in cities, under-construction homes would be able to draw a...

If you are planning to buy a property in Hyderabad, make sure you know about water supply pattern...

You may have implemented all the “21 ways to battle space crunch in your kitchen” but even then,...

The Goods And Services Taxes has clearned a proposal to charge a cess of 15 per cent on luxury cars...

The Centre recently gave its go-ahead to the construction of the national capital region’s second...

PropGuide tells you how a better metro connectivity will raise real estate prices in Noida.

The first phase of a Metro network is already changing the way people commute in Bengaluru. Upon...

A building code is a set of norms that govern construction of buildings by stipulating minimum...

PropGuide simplifies complex real estate jargons for you.

Proptiger has released it's quarterly review report on India's real estate sector. Ankur Dhawan,...

Sunil Mishra, Chief Business Officer, PropTiger, talks on new online realty platforms for NRIs.

Subscribe Now

To stay tuned with real estate updates


x +

Drop Your Query here