Understanding Technical and Legal Verification in Housing Loan
Koheli
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.
Conclusion
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.
Frequently Asked Questions