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Business Process Flow of Mortgages

  • A Mortgage loan is a secured loan which is secured on the borrower’s property by marking a lien on the property as collateral for the loan.
  • If the borrower stops paying, then the lender has the first charge on the property.
  • the borrowers repay the loan amount along with interest until there is no outstanding.


a) Types of Mortgage Loan

  • Home Loan: This is a traditional mortgage where customer has an option of selecting fixed or variable rate of interest and is provided for the purchase of property
  • Top Up Loan: Here the customer already has an existing loan and is applying for additional amount either for renovation of the house
  • Loans for Under Construction Property: In case of under construction properties the loan is disbursed in tranches / parts as per construction plan.

(b) Process Description

  • Loans are provided by the lender like banks or NBFC on variable/floating rate.
  • Borrower / Customer approaches the bank for a mortgage and relationship manager/ loan officer explains the customer about home loan and its various feature.
  • Customer to fill loan application and provide requisite KYC documents to the loan officer.
  • Loan officer reviews the loan application and sends it to Credit risk team who will calculate the financial obligation income ratio. This is done on the basis of credit score as per Credit Information Bureau (India) Limited (CIBIL) rating.
  • Once financial eligibility is determined, then along with customer documents the details are sent to the underwriting team for approval.
  • Underwriting team provide conditional approval along with the list of documents required.
  • As per the property selected by the customer, loan officer will provide the property details along with requisite documents (property papers etc.) to the legal and valuation team. Legal team will carry out title search on the property which is to determine legal owner of the property, any restrictions or any lien on the property etc. Valuation team will carry out valuation of property and determine its value.
  • Further verification of property to determine whether property is built as per the approved plan, whether builder has received requisite certificates, age of building to determine whether it will withstand the loan tenure, construction quality.
  • Legal and valuation team will send their report to the operations team which will generate letter of offer / Offer letter to customer which entails all details of loan such as loan amount, rate of interest, tenor, monthly installment, security address, fee/charges details



and term and conditions.

  • If Customer agree loan agreement is signed.
  • Once signed offer letter is received the operations team will release or disburse fund.


Risk & Controls around the Mortgage Process




Key Controls

Incorrect customer and loan details are captured.

A secondary review by independent teams of all the details captured .

Incorrect loan amount disbursed.

A secondary review by independent teams of all the details captured .

Interest         amount         is       in-                      correctly calculated and charged.

Interest auto calculated as per ROI specified in sanction letter.

Unauthorized changes made to loan master data or customer data.

Segregation of duties makers, checker check is implemented.


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