The home loan process is a lengthy one. With the right lender, loan approval does not take more than a few days, sometimes even a few hours. However, even after you have been approved for a home loan, document verification takes time. The document verification is followed by property verification and negotiations, which further take time. All loan applicants must read extensively about the home loan process so that they get a realistic idea of the timeline involved.
Most borrowers do not know about the home loan sanction letter and the difference between this document and the home loan offer letter. This article covers all aspects of the home loan sanction letter and the step-by-step guide on how to receive the home loan sanction letter. So, read on.
What is the Home Loan Sanction Letter and How is it Different from the Home Loan Offer Letter?
The home loan offer letter is the final document that a loan applicant must sign to have the final loan amount disbursed into their account. The home loan offer letter contains all important details related to your home loan, such as the sanctioned home loan amount, the agreed home loan tenor, interest rate type and the home loan interest rate at which you must repay the loan, prepayment and foreclosure charges, EMI bounce charges, etc. A loan applicant must visit their lender’s office to sign the loan agreement and it is only after they have signed the loan agreement, will the lender begin with the disbursal of the home loan funds.
The home loan sanction letter is different from the home loan offer letter. It is a legal document that states that the lender is willing to sanction you a home loan. The home loan sanction letter contains details of the loan offer that your lender wants to make to you. It contains important details, such as the loan amount that your lender wants to sanction, the interest rate type and the home loan interest rate at which this amount will be sanctioned, loan tenor, additional fees, etc. The main difference between a home loan offer letter and a home loan sanction letter is that the terms and conditions mentioned in the home loan offer letter are absolute and cannot be changed. On the other hand, the terms and conditions mentioned in the home loan sanction letter are open to negotiations. If as a borrower, you do not quite agree with any of the loan terms and conditions mentioned in your loan agreement, you can discuss this with your lender and request them to change the terms and conditions so that the loan becomes profitable for all parties involved.
How to Obtain the Home Loan Sanction Letter?
The process of obtaining the home loan sanction letter is fairly easy. Do your research and decide on your lender. Next, go to your preferred lender’s website and apply for a home loan by filling out the online home loan application form. When requested, submit all the document required for home loan and wait for the document verification process to get over. The document verification stage is followed by the property verification stage. Once you pass the document and property verification stage, your lender will release the home loan sanction letter to give you an idea of the home loan offer they wish to make to you. If you agree with the loan terms and conditions, sign the offer letter. If you are unhappy with the terms and conditions, talk to your lender and renegotiate the terms and conditions of your home loan.
Once you have agreed on the loan terms and conditions, your lender will ask you to send them a signed copy of your home loan sanction letter. Once they receive this, they will start working on the final loan agreement. Your final loan agreement will contain all the important details, such as the home loan interest rate you have been extended, the home loan interest rate type at which you have been sanctioned the loan, final agreed loan tenor, the sanctioned loan amount, additional charges, etc. When a home loan applicant receives their home loan offer letter, they must go through every thing mentioned in it carefully and sign the agreement only when they fully agree with everything mentioned in the agreement.