When it comes to applying for a home loan, there are several aspects that you should keep in mind. First and foremost, you should be aware of the eligibility criteria at a particular financial institution and how well you fit into the same. This should be a must before applying along with checking one’s budget and the EMI amount/loan amount that can be repaid conveniently every month without compromising on household necessities, other expenses, future goals and so on. Well, it’s no rocket science but being prepared beforehand will help you ace the entire process.
While applying for a home loan, you will have to keep several documents handy. Some of these important documents include the following:
- Proof of Identity- This one’s a no-brainer! You’ll need a passport/driving license/voter ID/Aadhar Card/PAN Card/NREGA Card for this one.
- Proof of Address- Aadhar Card/Voter ID/Driving License/Ration Card/Passport/Letter from Government Authority verifying the residential address/Telephone, electricity, water, gas and post-paid mobile phone bill/passbook or bank statements/municipal or property tax receipt/pension payment orders for retired employees.
- Proof of age- Mark sheet for 10th standard/Birth Certificate/Driving License/PAN Card/Passport.
- Proof of Income- This varies depending on the applicant, i.e. whether he/she is a self-employed individual or salaried professional.
Income documents for self-employed/salaried applicants
Self-employed applicants or businessmen require the following documents:
- Introduction of profession/business
- Profit and loss account statement of income, balance sheet, income tax return proof for last 3 years (CA certified)
- Advance tax payment receipts if any
- Copy of registration certificate of the establishment
- Certificate of practice for self-employed professionals
- Proof of investments made like FD certificates and share certificates among others.
Salaried applicants will need these documents:
- Form 16
- Proof of investments
- Payslip for last 3 months with bank statement for salary account
- Appointment letter
- Promotion/increment letters if applicable
- Last 3 years’ IT returns
Property documents needed prior to applying
- Title Deed/Sale Deed- This is the most important document needed while you are purchasing any property. This is the evidence which documents the sale of property and ownership transfer and is vital if you are planning on selling the property in question. This is also the ownership proof for your home. The sale deed should be registered at the office of the sub-registrar within a period of 4 months from the date of sale.
- Joint development agreement- This is a vital document when you are choosing a property which is being developed as a joint venture between the developer and landowner. The landowner will be providing his/her land and the developer will be building a project on the same. The agreement is a proof of ownership of the land in case of the builder/landowner and is a vital document.
- GPA- No we aren’t referring to GPA scores here so you can relax! This refers to the General Power of Attorney which is the legal consent that is given by one individual to another, authorizing the latter individual to function on behalf of him/her. This could cover purchase/sale of real estate on the behalf of the seller/buyer. If applicable, this is a compulsory document that should be there.
- Building Plan- You should always check whether the project has been approved for commencement of construction. Get the building plan that has been sanctioned before buying. This is also a document that you should have in hand.
- NOCs- Developers should possess NOCs from Government departments including the pollution control board, fire safety department, electricity board and so on.
- Ratification Deed/Supplementary Agreement- This is needed whenever the principal agreement has to be modified/changed.
- Allotment Letter from Co-operative society/Housing Board/Developer- This letter should be furnished while applying for a home loan. This is usually given to the first buyer of any property and will have all details of the property in question and the amount paid by the buyer. This letter will come in handy for getting your financial institution to sanction the remainder of the home loan amount.
- Previous sale agreement- If you are buying a resale property on loan, make sure that you get hold of the sale agreement between the property’s first owner and the developer.
- Possession Letter- First owners of any property have to obtain the possession letter which provides evidence of the property being handed over to the buyer on the date mentioned in the same.
- Payment Receipt- You should always have the original receipts of payment made to the builder. This is usually needed by banks prior to the home loan being sanctioned.
- Tax Receipt- You should keep the copy of the receipt showing the latest tax paid on the property with you.
- Encumbrance Certificate- The original copy of the encumbrance certificate is needed and documents any previous transactions/mortgages on the property in question.
- Demand Letter from vendor prior to disbursement.
- Bank statement of own contribution receipt.
- NOC from building association/society.
- No-dues certificate from building owners association.
- Approved construction plan.
- Conversion order in case the property being purchased stands on converted land.
- Sanction of layout approval plan.
- Release deed in case you are buying a property that was inherited by the seller or is a settlement of the property owner by the legal heirs.
- Completion Certificate.
- Khata Certificate and Extract if applicable.
Make sure you have these documents at hand before applying for a home loan. Also, use a home loan EMI calculator to work out the amount you will be repaying every month. This will help you plan out your finances better.