Guide for Home Loan Sanction and Disbursement Process – Home Loan Stories - Kotak Bank

13 AUGUST, 2019

The home loan process is often divided into three main steps,

  • Application
  • Sanction
  • Disbursement

Once the applicant’s eligibility for a particular amount of home loan is determined, the application process begins. Once the application is submitted, the loan lender inspects it and gives their approval when it meets all the required criteria. After the approval of a loan, lenders conduct verification of the property and documents submitted before ultimately disbursing the home loan.

Sanctioning of home loan

The home loan process is much more simplified when the applicant’s documents are true are genuine. In such cases, they tend to get quick approvals on their home loan. Factors that directly influence the sanctioning and amount of home loans are as listed below:

  • Age of the applicant/s
  • Income
  • Professional qualifications
  • Stability of the applicant’s job or business
  • Capability to repay the debt
  • Credit score

Moreover, outstanding payments from loans taken prior to this home loan application, are reflected in an applicant’s credit history, which affects the sanctioning of home loan. The applicant needs to understand that sometimes, the sanctioning amount can be lower than the amount they requested for a home loan, and is at the discretion of the loan lender.

After the loan lender sanctions the home loan, the customers receive a confirmation letter. This confirmation letter comes with a validity of six months. They serve as proof that the applicant has been found eligible for the home loan. In some cases, customers experience slight delays if there is an issue with their application.

Disbursement process of home loan

Once the applicant receives the confirmation letter of the home loan amount being sanctioned, the process of disbursement of loan starts. Following are the important stages of home loan disbursement,

Submission of documents

The applicants have to submit a signed & duplicate copy of the offer letter. Then, the applicant is informed by the loan lenders that they are required to submit necessary property documents to disburse the home loan.

Legal & Technical inspection of documents

The legal department of the home loan lender thoroughly inspects the relevant property documents including the complete chain of the property. Once the property is found to be legally clear, the legal department submits a report to proceed further. Moreover, the report also contains a list of any additional documents required to disburse the loan amount.
Similar to Legal inspection, home loan lenders also do a thorough technical investigation to evaluate the valuation of property.

Disbursement of loan

After the verification of technical and legal aspects of the property, the home loan amount is disbursed as a single instalment or full amount according to requirement & terms and conditions agreed upon.
After disbursement of the loan, the applicants need to be punctual while repaying the loan. The home loan amortization schedule is a wise option to keep you on track with repayment of home loan amount.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.

Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.