SBI Home Loan

This is a looooong process. And also process may change in course of time.

Buying a house can be broken into the following steps.

1. Identify the house
2. Documents verification
3. Downpayment
4. Applying to loan
5. Loan approval
6. Part payments
7. Registration
8. Occupying the house
9. After-effects

Terms 

RACPC : The processing office of SBI

Market price :The actual price a person buys from builder

Government Guidance value : In each area, govt fixes some minimum value. Say MG Road, 15000, Whitefield 4500. It depends on apartments, location, facilities, etc.


STEP: Identifying a House
    This depends on your choice - budget, location, number of bedrooms, facilities, etc. You need to search a lot of places, take suggestions, compare different builders. Ask feedback from owners of previous projects. DO NOT LISTEN to MARKETING PEOPLE.

STEP: Documents you need to ask and verify

• Ownership of the land
• Mutual agreement between builder and land owner, if applicable
• Road connection to main road
• Approved plan of the construction

Get these documents and get them verified by a lawyer outside.

STEP: Downpayment

In order to get the loan processed, you need to make min of 5%. However banks generally recommend having 10% down payment.

So if your house is 50L, bank will expect you to pay 10L upfront and sanction loan for 40L.


Loan Process

It is a 2 sided process. Bank has to approve you and also the project.

1. Your approval depends on your salary, stability, assets, marital status, other EMIs, company, nature of job, previous credit history
2. Your builder approval depends on original documents, his history, etc.

1. Check with your builder whether they have approval from SBI. If not then it will take more time than expected. SBI has to approve the builder first.

STEP: Applying to Loan

1. You need to have a SBI savings account. So keep it ready. If it is joint account, both need to visit the bank.
2. Once you have the Savings account, fill the loan applicatio. Most of the other documents your builder will prepare. (Sale agreement, etc)
3. The bank will start the verification process of you and your builder. Once it is ready, they will call you. You will also get an SMS with the loan sanctioned. (In some cases you may not get the full amount for which you applied)
4. You need to visit the RACPC with any supporting documents. You need to sign a lot of documents.

Insurance

95% of the cases, SBI will push for insurance. Even you have lot of LIC policies, they will push for it. For a loan of 40L, 15 years, total premium will be 75,000.  15,000 for 5 years.

• You can pay the premium at one shot. In this case it will be less
• You can pay the premium in installments. 5 years option is provided.

You can pay the premium either directly or from the loan part. If it is from loan, they will sanction additional amount (subject to your paying capacity)

STEP: Payments to Builder

You and your builder will have an agreement on the payment deadlines. As soon as it over (say completion of 5th floor), builder will send you a release form. You need to sign that document. This document will be sent to SBI. Then bank will release the amount to the builder.

STEP: Registration

How to calculate the registration cost
Major components: 1% registration fee + 5.6% stamp fee
Extras : 15k (depends on your bargaining skills / agent)

Example: If your house is 1260 sft and market guidance value is 1750/-
                Price = 22L + Car parking = 25L
                Registration cost = 25,000
                Stamp paper        = 1,40,000

Registration Process

For registration, you need to ask available date from SBI and book an appointment. Go to RACPC, fill the form with registration date. You need to sync with builder before choosing date.

In some cases, you will get a slot on preferred date
* You started the process late. Normally slots get filled before 7-10 days.
* If it is auspicious day, then all slots will be over very fast.
* If taxes are increasing, then people will rush before deadline (happened Aug 1 2013)

In these cases, you can get it registered by yourselves.

The following DDs need to be taken on the name of SUB-Registrar, <Place> (Shivajinagar, etc)

1. Stamp paper cost (5.6%)
2. Registration cost (1%)

If you are doing registration by yourselves, then 2 more are required

1. MoD (Memorandum of Declaration) fee (= 1% of your loan, rounded to 100. Suppose loan is 40,68,000. Then fee = 4100) 
2. MoD registration fee = (1% of your loan)

 Either these DDs can be obtained by yourselves or from the RACPC (from your home loan).