What is the SBI home loan disbursement process for under construction property?

The release of the credit amount by the financial institution or bank to the borrower is known as home loan disbursement. Usually, the loan amount is disbursed after the down payments are made, documents are submitted, and legal formalities are done. The housing loan disbursement stages are in parts or full based on the construction stage and completion of your home. The home loan disbursement process is different in different banks based on the amount. Let me tell you about the SBI home loan disbursement process for under construction property: First, you will have to submit all the required documents to the bank authorities, such as identity proof, bank statement, address proof, etc. What documents will you need while applying for a home loan? After that, the mortgage has to be made in the bank’s favor. Wherever the mortgage’s creation is affected due to any valid reason, required security like a 3rd party guarantee, has been taken for a brief period. The bank will disburse the amount in multiple or single installments based on the terms and conditions of the particular home loan. When Home Loan EMI Starts for Under Construction Property When you buy an under-construction property, your bank may link the home loan disbursal to the property’s construction stages. In this case, you’ll either have to pay pre-EMI or you’ll get to choose between full EMI and pre-EMI payments. If you pick the ‘EMI under construction’ option,  you’ll be required to start paying EMI from the start of construction, but the amount of interest will be calculated based on the amount disbursed to the builder and the rest of the amount will be counted towards the principal. Pre-EMI is just the interest portion on the amount of the disbursed loan that you’ll be required to pay until the full disbursal is complete. I hope you understand the SBI home loan disbursement process for under construction property now! You may also want to check your home loan eligibility before the loan disbursement process. You can check your eligibility through NoBroker here,

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Read more: How to close home loan early? How to repay home loan faster? How to reduce EMI of existing home loan?

Getting your home loan approved is not an easy task. I applied for the SBI home loan last year and got to know about the home loan disbursement stages SBI vividly then. Not only SBI, but these stages are there in most banks. If you too are trying to know about the SBI construction loan disbursement stages, I am sure this answer is going to help you. So just read this answer and get to learn the entire process.

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  What is the SBI home loan disbursement?

Before learning about the construction loan disbursement stages, let's know what loan disbursement means. Loan disbursement refers to the process that a bank follows for approving a loan. It mainly has 3 stages-

• Application

• Verification

• Approval

Now let me share the SBI home loan final disbursement process in detail 

1. First, to apply for a home loan, you have to fill out the home loan application. There you will need to provide all your relevant details like- name, source of income, amount of income, property, existing liabilities and more

2. Next, you will need to submit the application form with all the necessary documents as per the details you mentioned in the form

3. You will have to submit the processing fee next which varies from one bank to another

4. Next, the lender or bank will verify all the documents that you provided and your credit report will also be checked

5. Next, your property will be verified and all legal aspects will be scrutinised before approving the loan

6. If all these go well, the loan will be approved and disbursed by the lender

What happens after the approval of the home loan?

The above-mentioned steps define how to apply for a home loan and how it gets disbursed, but to get the loan amount, some more steps are to be followed.

As soon as SBI sanctions your loan you will be called to submit more documents like 

• 2 E-stamps worth Rs 400 where you are the 1st party and SBI is the 2nd party

• E stamp worth Rs 200 with two parties, you and SBI

• E stamp worth Rs 200 where the first party is the guarantor and SBI as the second party

• All documents submitted for applying for the home loan must be submitted again

• Cheques in favour of SBI

The applicant and the guarantor must be present during this process.

 

The loan will get disbursed once you provide more documents from the builder like

• NOC mentioning that the property is not mortgaged in any other bank

• Tripartite agreement is to be submitted if the property is under construction

• Demand note from the builder is also to be submitted and it must match the payment schedule

• A mortgage has to be done in favour of the bank

• If the mortgage is hindered for any reason, the bank will ask for a third party as security

• Do verify the stamp duty and inform the bank about it as well. 

Once these are done, the bank, SBI, will disburse the loan amount in a single instalment or through many instalments as per the terms and conditions mentioned for your home loan.

 

Once the registration is done, an SBI officer will give the DD or demand draft to the builder or you might have to collect it from your bank’s branch. This is the entire construction loan disbursement process. 

The process takes about 7 days to 4 weeks since authentication is time-consuming. 

I hope you have understood everything about the home loan disbursement stages SBI.

  Read More:

What is Loan Disbursement?

HDFC Home Loan Disbursement Process Online?

Can I apply for pmay after loan disbursement

 

My friend took a home loan from SBI for his under-construction property a couple of months ago. He told me that SBI’s regular home loan can be used to buy property under construction. It has transparent processes and is widely available across the country. He also told me about the SBI home loan disbursement stages:

Keep the property-related Documents ready

Before you apply for the SBI home loan, you should keep all the legal documents related to your property from your builder, handy. It includes the booking receipt, a copy of the cheque, etc.

Take Legal Opinion

Get all the necessary legal documents verified by an advocate who’s a part of the SBI panel. He’ll be required to verify the Construction Agreement and Sales Agreement. Sometimes, the documents like the paid property tax receipt, Encumbrance certificate, etc. are required.

Take the Help of NoBroker’s Legal Experts if Need Help with SBI Home Application

Property Valuation

After the completion of the legal valuation, the property valuator belonging to the SBI panel will evaluate the property. A letter is provided to you after the valuation.

Franking or E-stamping of Agreement

It’s required for an SBI Home Loan that the construction and sale agreement is e-stamped or franked. The e-stamping’s value may differ based on your property’s value. Franking can be done at the registered office, while e-stamping can be done at select register offices, syndicate banks, and post offices.

Application Submission

After that, the application form along with the documents needs to be submitted to the SBI. These documents include legal opinion, valuator statement, etc.

Waiting Period

The waiting period for the loan approval may vary from one person to another. The special housing loan branch can disburse the loan within 3 days.

Documentation

SBI will call you as soon as the loan is sanctioned by them. After that, you will have to submit more documents, such as:

2 E-stamps worth Rs. 400, where you’re the 1st party and SBI is the 2nd party.

E-stamp worth Rs. 200, where the parties are the same as above.

E-stamp worth Rs.200, where the 1st party is the guarantor and SBI is the 2nd party.

Every document submitted while loan application.

Cheques in favor of SBI.

Both you and your guarantor are required to be there at the bank with all the above documents.

Loan Disbursement

Once the loan is sanctioned by the State Bank of India, you are required to get these documents from the builder:

NOC mentioning that the property isn’t mortgaged at any other bank.

The tripartite agreement, in case the home is under construction.

Demand note from the builder that matches the payment schedule.

Registration

Verify the stamp duty and inform SBI of the same before the registration process. After completion of the registration process, an SBI bank officer will visit you and hand over the DD to the builder or you’ll be asked to collect it from your branch.

SBI home loan disbursement time:

3 to 10 days.

Get a Home Loan at Lowest Interest Rates for Your Under Construction Property Today!

Now you know about the SBI home loan disbursement process for resale flat.

Read more:

What are SBI home loan reviews?

What is the processing fee for SBI home loan?

How to close SBI home loan?

How to reduce SBI home loan tenure?

This is all on the SBI home loan disbursement stages.