A home loan is a type of personal loan that helps you to buy your dream abode. Any individual having adequate creditworthiness and the required income to pay off the loan amount can avail of a home loan. However, loan facilitators will verify your documents for a home loan before sanctioning the amount. Here’s a checklist for first-time home buyers to ensure that you have every document in order before applying for a home loan.
Documents required for identity verification
- Proof of identity: PAN card, Aadhar card, Voter ID
- Address proof: Electricity bill, passport, driver’s license, water tax, property tax, post-paid mobile phone bill, bank passbook, ration card, insurance policy receipts, a letter from any governmental body confirming your address
- Age-verification documents: Birth certificate, class 10 mark sheet, bank passbook, driving license
- Passport-sized photographs
Documents regarding property
- Stamped sale agreement
- Non-Objection Certificate (NOC) from housing property, issued under the UCL Act of 1976
- Certificate of possession
- Receipts of the payments made to the developer
- Receipts of advance payments for flat purchases
- Receipts of taxes paid for the property from the time of its first possession
- Receipt of land tax payment
- Detailed estimation of construction costs
- Approved building plan showing the floor plan (for flats)
- Documents of the previous owners’ (in case of house resale)
- Plot title’s deeds (in case of house construction)
- A civil engineer or an architect’s estimate of the house construction
- A record of the plans approved by the local authorities
- Proof that there are no restrictions on the property encompassing the last 12 to 30 years
- A copy of relative order, if an agricultural land is converted
- A report stating the value of the property by an impaneled valuer
- Power of Attorney to collect original property documents
- Letter requesting handing over of the property to legal heirs or nominees, in the event of the demise of the loan applicant
Documents required for salaried professionals
- Completed home loan application form with all your basic details
- Any one of the identification, address, and age verification documents
- Form 16 income tax details
- Payslips from the last three months from the time of the loan application
- Letter of increment
- Investment proofs like fixed deposits and shares (if any)
- An employment contract (if your job is less than a year old)
Documents required for self-employed applicants
- Income tax returns since before at least three years from the time of loan application
- Their company’s profit and loss statements or balance sheets
- Their company’s authorization details or other equivalent documents
- Professional practice license (for consultants and doctors)
- Registration certificate (for business owners, shops, factories, and other establishments)
- Business address proof
- Latest 26 AS form
- Your business profile
- A list of directors and shareholders, with their individual shares, as certified by a CA or CS, in the case of a company
- A partnership deed, if the company is owned by two or more partners
- All first-time buyers and their co-applicants must submit completed application forms with their signatures and passport-sized photographs.
- You must also submit documents that prove you have repaid any and all your outstanding debts (if any).
- You also have to submit details of ongoing loans like monthly EMI amount, loan tenure, loan purpose, and so on.
- Lastly, you have to submit a cheque for the processing fee for the home loan provider.
Documents required for NRIs/PIOs Buyers
- KYC documents like passports with Visa stamps and proof of address with their current foreign address
- Proof of income for salaried individuals
- Employment contract attested by their employer abroad and the embassy
- Work permit or identity card (must be translated into English, if they work in a country that uses another official language)
- Salary slips or wage certificates (for applicants from the Middle East)
- Bank transactions that show salary credit details of at least six months from the time of loan application
- An acknowledged copy of the previous year’s ITR (except for individuals residing in the Middle East and merchant navy employees)
- A copy of the Continuous Discharge Certificate (CDC), only for people working in the merchant marine
- Most recent employment contract and form P60/P45 for salaried individuals
Documents required for self-employed NRIs/PIOs applicants
- Business licenses for consultants and doctors
- Registration certificate for factories, shops, and organizations
- Business address proof
- Proof of income
- Balance sheets detailing profits and losses of their business of at least three years before the time of loan application, verified by a CA
- ITRs of the last three years (except for NRIs/PIOs in Middle Eastern countries)
- Bank statements in the name of an individual or their company of at least six months
Property documents required for NRIs/PIOs
- Title deeds tracing the property’s owner
- A non-Encumbrance certificate detailing that the property is free from any restrictions
- An architect or civil engineer’s summation of the property’s condition
- Payment receipts made for construction, purchase, or extension
- Most recent tax payment details
- Letter of cooperation and allocation from housing society owners
- Receipts for investing money through banking channels from NRE/NRO accounts in India
If you are having trouble navigating the home loan application website or would prefer to discuss the loan product you want to purchase, you can consult a loan DSA channel partner. They are mediators that ease the process of application and sanction for loan buyers. ApnaPaisa, the digital arm of Andromeda Loans, offers experienced loan professionals to help with all your home loan queries.
Home loan FAQs
Q. Can I get a home loan without property registration documents?
A. If you are availing of a home loan for a property yet to be completed, you do not need property registration documents. However, you need to obtain a completion certificate after possession. Only when your property is under construction, loan facilitators will let you borrow money without property registration documents.
Q. Can I apply for a home loan online?
A. Yes, most lending institutions allow you to apply for home loans online. You have to fill up their registration form, submit basic details, and show your income tax details, salary slips, and bank transaction documents to proceed. The loan facilitators will verify your KYC documents and if you have been approved, you will receive the loan amount.
Q. Are there any benefits of availing of a home loan?
A. The best benefit of taking a home loan is that you can choose to repay it in monthly installments depending on your income while living in that house. Your monthly EMIs will depend on your loan tenure, which may be from 5 to 30 years, based on the plan you have chosen. Section 24B of the Income Tax Act allow you to save over INR 1.5 to 2 lakh on tax deductions on your loan amount. Houses are such an asset, whose value does not depreciate over time like automobiles, so you reap its benefits long after you have paid back the loan.