Understanding Technical and Legal Verification in Housing Loan


Understanding Technical and Legal Verification in Housing Loan

The majority of people need a housing loan to support their purchase of a home. Applying for a mortgage can be a difficult and drawn-out procedure. One of the essential parts of the housing loan process is the technical and legal verification of the property. 

We will discuss the importance of technical and legal verification in housing loans in this post and how it affects the loan application procedure.

Technical Verification

The bank or other financial institution will undergo a technical verification process to evaluate the physical characteristics of the bought asset. The property is inspected to ascertain its state, age, location, and structural soundness.

The following actions are a part of the technical verification process:

Site Visit - To confirm the property's location, accessibility, and closeness to public amenities like markets, hospitals, and schools, the bank sends a representative to visit the property.

Evaluation of Building Condition - The bank's representative will evaluate the general state of the property, considering the level of construction, the age of the building, and any structural flaws.

The bank will confirm the property's ownership and ensure the seller is the genuine owner and has the authority to sell the property.

Estimate of Property Value: The bank will determine the property's market worth and loan eligibility based on the evaluation.

Legal Verification

The bank or financial institution will go through the legal verification process to ensure the property is clear of liens and in good legal standing. Ensure the property has a clear and marketable title, which guarantees that the seller has the authority to sell the property and that there are no liens or other legal issues.

The following actions are part of the legal verification process:

Verification of Property Documents: All Property Documents, including the Sale Deed, Title Deed, Property Tax Receipts, and Any Other Relevant Documents, will be verified by the bank's legal department.

The bank will search to see if the property is subject to liens or encumbrances, such as easements, mortgages, or other legal challenges.

Verification of the Seller's Legal Status: The bank will confirm the seller's identity and legal capacity to sell the property.

Verification of Builder's Credentials: If the property is being bought from a builder, the bank will check the builder's credentials, including their history and any pending lawsuits.

Significance of Technical and Legal Verification in Housing Loans

The technical and legal verification process is essential to the home loan application process to guarantee that the property being purchased is both legally and physically sound. It is simpler to finance and submit a loan application for a property with a clear and marketable title. The verification procedure also ensures no liens, controversies, or structural flaws on the property.

The bank can reject a loan application or reduce the loan amount if problems are found during the verification procedure. The bank may occasionally demand that the problems be fixed before giving the loan. In rare cases, the bank may insist that the buyer acquire title insurance to guard against potential legal disputes.


As a result, a critical step in the mortgage application process is technical and legal verification. It guarantees that the property bought is physically sound and unencumbered by liens or legal problems. The loan application process is simpler and easier to finance a property with a clear and marketable title. Working with an established bank or financial institution with skilled legal and technical staff is crucial for ensuring the verification procedure is complete and accurate. Homebuyers can prevent future legal battles and financial damages by doing this.

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