Home Loan

A home loan is an amount of money that an individual borrows from a bank or money lending company at a certain rate of interest to be paid with the EMI every month. The property is taken as a security by the money lending company from the home loan. The property can either be commercial or personal in nature. When the borrower cannot pay the dues, the lender will possess all the legal rights to recover the outstanding loan amount by sale of the property in question.

Types of home loans

  • Home purchase loan
  • This is the loan that one takes for purchasing a home.
  • Home improvement loan
  • This loan covers expenditure related to repairs of your home or even renovation.
  • Home construction loan
  • This loan comes in handy when you are building a new house.
  • Land purchase loan
  • Someone wishing to buy a plot for construction his/her own house can avail this loan.
  • Home extension loan
  • Suppose you plan to add another room, garage, bathroom or kitchen to your home. This is the loan that you should apply for and this also comes in handy if you are planning to have another floor.
  • Joint home loan
  • These are loans taken by two people or even more. For instance, spouses can apply for joint home loans.
  • Home loan balance transfer
  • you can use this mechanism to switch your outstanding loan amount to a difference lender with better terms and conditions and lower interest.
  • Top up home loan
  • This kind of loan helps you borrow some more money above the outstanding loan amount. There are attractive rates of interest offered.
    The documents required for a home loan are more or less uniform among various banks and HFCs. A few specific requirements may vary from lender to lender. The hone loan documents required might also differ on the basis of your loan scheme, purpose of the loan, individual credit profile etc. In this post, we have listed common home loan documents that your lender might request at the time of loan application.

Checklist of Documents required for home loan

  1. Completed home loan application form
  2. Passport size photographs
  3. Proof of Identification
    • Driving License
    • PAN card
    • Passport
    • Aadhar card
    • Voter’s ID card
  4. Proof of age
    • Aadhar card
    • PAN card
    • Passport
    • Birth Certificate
    • 10th class mark sheet
    • Bank passbook
    • Driving License
  5. Address proof
    • Bank passbook
    • Voter’s ID
    • Ration card
    • Passport
    • Utility bills (telephone bill, electricity bill, water bill, gas bill)
    • LIC policy receipt
    • Letter from a recognized public authority verifying the customer’s address
  6. Income documents Salaried individuals (any one of the following)
    • Form 16
    • Certified letter from employer
    • Pay slip (last 2 months)
    • Increment or promotion letter
    • IT returns (for 3 years)

Self Employed or Businessman (any one of the following)

  • Income tax returns (ITR) of last 3 years
  • Balance sheet and profit & loss account statement of the company/firm (duly attested by a CA)
  • Business license details (or any other equivalent document)
  • License of professional practice (for doctors, consultants, etc)
  • Registration certificate of establishment (for shops, factories & other establishments)
  • Proof of business address
  • Property Documents
  • NOC from societ y/builder
  • Detailed estimate of the cost of construction of house
  • Registered sale deed, allotment letter or stamped agreement of sale with the builder (original copy)
  • Occupancy certificate (in case of ready-to-move-in properties)
  • Property tax receipts, maintenance bills and electricity bills
  • Receipts of the advance payments made towards the purchase of flat (original)
  • An approved copy of the building plan (key plan/floor plan in case of flats)
  • Original of the land tax paid receipt and possession certificate as issued by the revenue authority
  • Payment receipt or bank account statements showing payments made to the builder or seller