The process to avail of a home loan is a lengthy one. The entire process can take from a few days to a few weeks and there are many steps involved. Most people do not know that before they get their home loan offer letter, they are first presented by their lender with a home loan sanction letter. In this article, we discuss what is a home loan sanction letter, its importance and the process to avail of it.
What is the Home Loan Sanction Letter?
The home loan offer letter is the final loan agreement which contains details of the loan terms and conditions that you and your lender have finally agreed on. However, before a lender releases the home loan offer letter, they release the home loan sanction letter. The home loan sanction letter is an official document containing details of the loan offer that your lender wants to make to you.
The key difference between the home loan offer letter and the home loan sanction letter is that everything mentioned in the agreement is negotiable. If you do not agree with the terms and conditions mentioned in the home loan sanction letter, you can initiate another round of negotiations to put your points across and negotiate for more favourable home loan terms and conditions.
What Does the Home Loan Sanction Letter Contain?
Your lender will release the home loan sanction letter after they have successfully verified the documents required for home loans submitted by you as well as thoroughly checked and assessed the property that you plan to buy with the loan funds.
When you get the home loan sanction letter, go through it carefully and make sure it contains the following details.
1. Your name and other details
2. The loan amount that your lender is willing to sanction to you
3. The time or the number of years that the lender is willing to give you to repay your loan
4. The home loan interest rate they will charge you
5. The period for which the home loan sanction letter will stand valid
6. Details related to your monthly EMIs as well as other important terms and conditions related to your home loan
How to Obtain the Home Loan Sanction Letter?
Planning to apply for a home loan and want to know the process to avail yourself of a home loan sanction letter? Here’s how you can obtain one.
1. Apply for a home loan by either filling out the home loan application form online or going to your lender’s office and applying for a home loan in person. While filling out the form, you will be asked to share some information about yourself, such as your name, address, income details, etc. Enter all the details correctly and carefully.
2. Once your lender receives your home loan application form, they will take a call on whether or not they want to sanction you a home loan. If they find your credit profile agreeable, they will reach out to you and ask for additional documents.
3. This will be followed by the document and property verification stages. During these phases, your lender will hire expert legal and technical experts to check your documents and the property you plan to buy with the loan funds and make sure everything is okay.
4. If you pass this stage, your lender will release the home loan sanction letter. The letter will be emailed to you. Go through the contents of the letter carefully and sign only if you agree with all the terms and conditions mentioned.
Home Loan Sanction Letter: Documents Required
These are the documents you will need to submit to obtain the home loan sanction letter.
1. KYC documents. Under this category, you can submit an Aadhar Card, Passport, PAN, Driving License, etc.
2. Proof of income documents. Under this category, lenders generally ask for salary slips, profit or loss statements and income tax returns along with last few years’ bank account statements.
3. You will also be asked to submit address-proof documents.
Please note that the documents required for home loan sanction letters vary from lender to lender. So, if you are planning to apply for a home loan, talk to your lender and request them to give you the list of documents you will need to submit during the home loan process. This will make your life a lot easier.
