Documents Needed for Home Loan Application

One of the most joyous moments of your life would probably be the day you'll hold the key to your new house. It certainly is a feeling of pride and achievement. However, you would surely know that it's not an easy task to come up with the money to buy a property.

Before you start compiling the documents required for home loan, you will have to tick off certain prerequisites, such as home loan eligibility, your credit score, age criteria, any collateral security, etc. You also need to make sure that you check with your respective lender i.e., commercial bank or housing finance company (HFC) regarding the down payment charges or other costs, such as processing fees, administrative charges, or prepayment charges. Apart from noting down the EMI amount and interest rates, ensure that you have checked the tenure and the type of loan as well as repayment options.

Your lender will conduct a verification process. Hence, you must have all the documents required for home loan in place, to avoid any back and forth or loan rejection.

Must-Have Documents for Home Loan Application

Whether you are someone who is a first-time home buyer or have already taken a property loan, it's vital that you check with your respective lender before applying as there are separate policies for both. Moreover, the document list varies based on the property type, type of loan, and most importantly the lender you wish to get your loan sanctioned from.

Here is a general list of mandatory documents required for a home loan.

• Loan Application Form

A loan application form enlists all the requisite details that your respective lender wants you to fill in. This enables the lender to understand and review your requirement thoroughly. Different lenders have varied templates for the application form. However, a general overview of any home loan application across the spectrum would be as follows.

1. Your personal details
2. Your employment and income details
3. Your financial details
4. Your property and loan details

Note: The form concludes with a declaration requesting you to acknowledge the information provided along with the enclosed documents. Additionally, you have to provide 2 or 3 passport-sized photographs.

• Identity Proof

This enables the lenders to maintain a record of your proof of identity. Here is a list of identity proofs that also acts as valid proof of age.

1. Passport
2. Aadhar card
3. Driving license
4. Voters ID card

• Residence Proof

A valid residence proof, either permanent or temporary, is another important home loan document. Address proof is essential for the lender to verify your details and do a background check. It is also needed for the lender to send across any important papers or documents via courier.

1. Electricity bill (not more than 3 months old)
2. Telephone bill (not more than 3 months old)
3. Ration card
4. Passbook with address

• Bank Account Statement

A bank account statement determines your home loan eligibility. You are required to submit a copy of your bank account statement, either 6 months to 1 year, depending on the prerequisites of the lender. Your creditworthiness is one of the key factors that determine whether the lender will approve to sanction your loan or not. Hence, you must keep a good credit score. Here is the range, aim for good or excellent.

550 –650: average

650 –750: good

750 –900: excellent

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Documents Required Related to the Property

Most important of all are the documents related to the property that you are planning to buy. Here is a general overview of the documents required.

• In the Case of a New House

1. The receipts of payments made to the developer
2. Allotment letter
3. A copy of the sale agreement
4. Building plan or floor plan of the property
5. Receipt of taxes paid from revenue authorities

• In the Case of Resale

1. Title deeds, including the list of previous property documents
2. A copy of the sale agreement
3. Building plan or floor plan of the property
4. NOC from Society
5. Proof of no encumbrance certificate on the property

Note: Before entering into an agreement, you need to ensure and get your property documents checked by your bank or legal expert. You should also inspect If the property is in good condition.

• Statement of Liabilities and Personal Assets

Another document that determines your home loan eligibility is your financial statement. A detailed financial statement of your liabilities and personal assets is required for your lender to analyze your financial status. Your liabilities may include your personal loans, credit cards, student loans, mortgages, or unpaid taxes. Whereas your assets are your securities and funds, trading accounts, retirement accounts, real estate, etc.

Documents Required With Respect to the Profession of the Applicant

Based on your profession, income proof and other relevant certificates are other key documents required for home loan. Whether you are a salaried individual or a self-employed professional/business person, here is a list of standard documents that you will be required to present during the application process.

• Salaried Individual

1. Latest salary certificate (original) from the employer/ salary slip (last 3 months)
2. Form 16/ IT returns of the past 3 financial years

Self Employed Professional/ Business Person

1. IT returns certified by chartered accountant/assessment orders copies of the last 3 years
2. Challans as proof of advance income tax payment
3. Audited balance sheet and profit & loss statement
4. Proof of business address (for business person)

Additional Documents (Wherever Applicable)

The below-listed additional documents required for home loans would vary for different banks and HFCs. These lenders ensure that they take these documents from you as a guarantee in case of any unforeseen or unfortunate incident.

• LIC/ Insurance Policy of the Buyer

LIC or any other term insurance policy could be requested by the lender as a guarantee against your home loan. The same could be mortgaged by the lender in the event of an unfortunate incident.

• Documents of the Guarantor or Co-Applicant

A guarantor or co-applicant is someone whose documents are similar to that of an applicant. The requirement could vary for different lenders.

1. 2 or 3 passport-sized photographs
2. Identity proof
3. Residence proof
4. Statement of liabilities and personal assets

• Legal Heir (In the Event of Demise of the Loan Borrower)

1. A letter mentioning handing over property documents from legal heir/ nominee(s)
2. A letter mentioning surrendering the right to legal heirs/ nominee(s) for property documents handover

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General Takeaway

We hope this quick guide proved beneficial for you. To sum up, here are some of the key points that could help you during your home loan process.

• Read all the terms and conditions carefully before signing the loan application.
• Read up on the state law that applies prior to acknowledging the sanctioned amount.
• Read up on the tax benefit that is applicable for resident Indians, under the Income Tax Act of 1961.
• There are certain minimum standards that the lender needs to follow, such as providing you with all the relevant information and authenticated copies of the same. Make sure you receive them.

Now that you have an understanding of the documents required, make sure you check out the exquisite properties offered by Adani Realty!