Home loans are loans availed of to buy a residential property. End-use restrictions become automatically applicable on these loans. Home loans are a type of secured loan; they are backed by the property bought with the loan funds. In case of a loan default, the lender can sell the pledged property to recover the money lost. Consequently, lenders charge a low rate of interest on home loans. Home loan interest rates start from 8.35% per annum, making home loans one of the cheapest of all loans and a highly economical choice. However, home loans are extended by lenders only to those individuals who meet the home loan criteria.
Home loan eligibility revolves around factors, such as credit score, nationality, income, age, etc. Only those individuals who meet the qualifying criteria are considered for a loan. Lenders also ask for several different documents for home loans. The list of documents required for these loans is long. Lenders ask for a variety of different documents to verify the information provided by loan borrowers in their loan applications as well as the verify their repayment capacity and creditworthiness. Here are the documents required for home loan that you must keep ready with you for a hassle-free loan application process.
- To start with, you will need to submit a properly filled loan application form along with a few of your passport-size photographs.
- Your lender will also ask you to submit identity-proof documents. Under this category, you can submit a PAN Card, Aadhar Card, Passport, Voter ID, Driving License, etc.
- You will also need to submit age-proof documents. Under this category, you can submit a Birth Certificate, Aadhar Card, PAN Card, Passport, Driver’s Licence, etc.
- Under the address-proof category, you can submit any document that has your permanent address, such as your Aadhar Card, Bank Passbook, Utility Bill, Driver’s license, etc.
- You will also need to submit your Form 16. The form 16 is important as it provides details of your income and the taxes that have been deducted at source.
- All salaried individuals are also asked to submit salary slips, the last three years’ income tax returns and their employment certificate that highlights all details, such as their profile and the number of years that they have served in the organization.
- If you are a self-employed individual, you will be asked to submit your business’ profit and loss statement, company balance sheet and tax returns.
- Self-employed individuals are also asked to submit their business address proof to be considered for a home loan.
- You will also need to submit your business registration certificate as well as a copy of your business account statements.
- Under the property documents, you will need to submit the original sale deed or the agreement of sale, the No Objection certificate from the society or builder as well as the occupancy certificate.
- You may even be asked to submit the land tax receipt and possession certificate, building plan, etc.
These are generally the documents that lenders ask for when someone applies for a home loan. However, do keep in mind that this is not the final list. Your lender may ask for more or fewer documents. So, it is always a good idea to speak to your lender and obtain a list of all the documents required for a home loan. This will make the process of applying for a home loan quick and hassle-free.
Individuals planning to apply for housing finance must also use the home loan eligibility calculator to assess the home loan amount they qualify for and will get approved for based on their age, city of residence, income, other debt obligations, etc. When one applies for a home loan amount they are eligible for, chances of loan approval increase significantly and so does one’s ability to secure the loan on the best loan terms and conditions. What makes it also possible to get a good home loan deal is having a high CIBIL score, a stable job and income and paying a high down payment. A home loan is a huge financial responsibility and you must commit to this responsibility only if you are fully ready.
