You might have come across terms such as co-owner, co-borrower, co-applicant, or a co-signer while applying for home loans. If you are not aware of the differences between these terms, it is important to understand before applying for a home loan. As, each role has different legal and financial obligations towards the repayment of the home loan, which makes it even more important to understand them in the detail and decide accordingly. Here we have described these home loan terminologies in detail to make you understand better.
To ensure the whole process of the home loan application gets right, you need to take care of everything right from filling up the application form to the final disbursement. Obtaining a home loan sanction letter from the bank or other financial institution is an indispensable part of this process. The lending institution undertakes a tedious process of checking all the documents submitted by the applicants and ensures that all aspects involved in the loan application are valid before sending them the sanction letter. The first-time home loan applicants must understand the various features and content of the sanction letter before signing the loan agreement.
Factors assessed before giving a Sanction Letter
The sanction letter is signed by the concerned authority to inform the applicants that they are eligible to get a home loan, and the same shall be approved subject to fulfilling the remaining formalities as prescribed by the lender. It is based on the findings of the lender after examining the following aspects:
Contents of the Sanction Letter
The home loan sanction letter contains the following details:
The format of a home loan sanction letter may slightly vary from one financial institution to another. Therefore, it is essential to speak to the concerned customer relationship officer before signing the loan documents.
The validity of the Sanction Letter
The validity of a sanction letter is about six months, and if the loan is not availed during this time, the sanction letter will lapse, and the whole process will have to be done again by the applicants.
Documents required for a Sanction Letter
Note: The applicants may also be asked to submit additional documents before the final loan agreement is provided.