Purchasing a home is a significant milestone in one’s life. However, deciding on the specific home loan among multiple available options can be a challenging task, filled with complex processes and endless paperwork. As you set yourself to buy your dream home, one important aspect that you simply can’t ignore is to be well prepared with the documents required for a home loan.
Read this blog till the end to get complete details about the documents required for getting a home loan, their importance, and their actual in the process of getting a home loan.
Table of Contents:
- Documents Required for a Home Loan Application
- Documents Required for a Home Loan Application by Salaried Individuals
- Documents Required for a Home Loan Application by Self-Employed Individuals
- Property Documents Required along with a Home Loan Application
- Documents Required for a Loan Guarantor
- Documents Required for NRI Home Loan Application
- What happens if you miss out on an important document?
Documents Required for Home Loan Application
To streamline your home loan application process, it is essential to ensure that you have the following documents in order. This table outlines the key documents required:
| Document | Description |
|---|---|
| Home Loan Application Form | Obtain the application form from your nearest bank branch or their website. Fill it out completely and sign it. |
| Passport-size Photographs | Provide two passport-size photographs, with one of them attested on the application form. |
| Identity Proof Documents | Submit any government-approved document with your photograph, such as a PAN card, Aadhaar card, passport, driver’s license, or voter ID card. |
| Age Proof Documents | Provide a document that verifies your age, such as a PAN card, Aadhaar card, passport, driver’s license, or birth certificate. |
| Address Proof for Home Loan | Submit a document that displays your permanent address, such as an Aadhaar card, passport, driver’s license, bank passbook, or utility bill. |
Documents Required for a Home Loan Application by Salaried Individuals
| Document for Salaried Individual | Explanation |
|---|---|
| Form 16 | Submit a duly filled Form 16, which provides details of your income and taxes deducted at source. |
| Employment Certificate | Obtain a letter from your employer certifying your employment status, the duration of your employment, and your position within the organization. |
| Salary Slips | Include your salary slips for the last 3-6 months, which offer proof of your regular income and allowances. |
| Income Tax Returns | Provide your filed Income Tax Returns for the past three years to showcase your tax compliance and income history. |
| Investment Proofs | Include investment proofs, such as shares or fixed deposits, if applicable, to demonstrate your financial assets. |
| Salary Credit Account Statement | Present your account statement reflecting the credit of your salary to showcase a stable income source. |
Documents Required for a Home Loan Application by Self-Employed Individuals
| Document | Explanation |
|---|---|
| Business Address Proof | A document verifying the address of your business, such as a utility bill or lease agreement. |
| Tax Returns | Duly filed tax returns for the past three years, showcasing your income history and tax compliance. |
| Company Balance Sheet | Financial statement providing an overview of your company’s assets, liabilities, and shareholders’ equity. |
| Profit and Loss Statements | Financial statement summarizing your company’s revenues, costs, and expenses over a specific period. |
| Audit/Attestation by Chartered Accountant | Verification of the accuracy and fairness of your company’s financial statements by a certified professional. |
| Business License/Professional Practice Documents | Relevant licenses or documents certifying your business or professional practice (e.g., doctors, lawyers). |
| Copies of Registration Certification | Copies of certificates indicating the registration of your establishments, such as shops, factories, clinics, offices, etc. |
| Business Account Statement | Statement reflecting the transactions and financial activities of your business account. |
Property Documents Required Along with Home Loan Application
| Documents | Explanation |
|---|---|
| No Objection Certificate (NOC) | Obtain a NOC from the society or builder, confirming that there are no objections to the property’s sale or purchase. |
| Original Sale Deed/Agreement of Sale | Submit the original, registered sale deed, letter of allotment, or stamped agreement of sale provided by the builder, proving ownership of the property. |
| Occupancy Certificate | For ready-to-move-in properties include the occupancy certificate, which certifies that the property is fit for occupancy as per local building regulations. |
| Maintenance and Utility Bills | Provide copies of maintenance and electricity bills, as well as property tax receipts, indicating the regular payment of charges associated with the property. |
| Receipts for Advance Payments | Include original receipts as proof of any advance payments made towards the purchase of the property. |
| Building Plan | Submit a copy of the building plan, specifically relevant for flats, villas, bungalows, or any other type of construction. |
| Land Tax Receipt and Possession Certificate | Include the original receipt of land tax paid, along with a possession certificate issued by the relevant authorities, verifying the possession of the property. |
| Bank Account Statements | Present bank account statements reflecting any payments made to the seller or builder, demonstrating the financial transactions related to the property. |
| Construction Cost Estimate | In the case of construction loans, provide a detailed estimate of the construction costs to ascertain the loan amount required. |
Documents Required for a Loan Guarantor
| Document | Description |
|---|---|
| Proof of Identity | This document, such as a valid passport or driver’s license, is required to confirm the identity of the guarantor. |
| Proof of Residence | The purpose of this document, such as utility bills or a rental agreement, is to verify the current address of the guarantor. |
| Proof of Income | Lenders request this document, which may include recent pay stubs, employment contracts, or tax returns, to assess the guarantor’s financial capacity and ensure they can fulfill the loan obligations. |
| Bank Statements | These statements from the past three to six months provide a comprehensive overview of the guarantor’s financial history, allowing the lender to analyze their financial stability. |
| Credit Report | A credit report obtained from a recognized credit bureau enables the lender to evaluate the guarantor’s creditworthiness, including their credit score, payment history, and any outstanding debts. |
| Guarantor Agreement | The guarantor agreement is a formalized document provided by the lender that outlines the commitments and responsibilities of the guarantor in guaranteeing the loan. |
Documents Required by NRI Home Loan Applicants
| Required Documents for Home Loan (NRIs) |
|---|
| Document establishing KYC |
| Salary Certificate from employer |
| Last 3 to 6 months’ salary slips |
| Latest IT Returns |
| Business documents for Self Employed NRIs |
| Copy of Passport with residence visa page |
| Proof of employment by the Government |
| Property documents with cost estimates |
| Attested income documents for Salaried NRIs |
| Bank statements from overseas |
| Last 6 months’ NRO/NRE bank statement |
| Power of Attorney (if applicant is unavailable) |
What Happens if You Miss out on an Important Document?
- Missing an important document can result in loan application dismissal
- Check with the lender for alternative document submission options
- Request time to procure missing documents without delaying the loan process
- File an FIR if documents are missing and provide the report to the lender
- Keep all required documents handy before applying for a home loan
- Once verified, your loan is likely to be approved. Apply now and get started!
Conclusion
Getting a home loan involves a lot of paperwork and documentation. By understanding and being ready with the required documents in advance, you can simplify your application process and submit a strong home loan application to potential lenders. However, it’s crucial to note that different lenders may have different requirements, so it’s advisable to consult with the selected financial institution or mortgage broker to ensure compliance with their specific expectations.
Disclaimer:
This blog is written to make it easy for readers to understand complicated processes. Some information and screenshots may be outdated as government processes can change anytime without notification. However, we try our best to keep our blogs updated and relevant.
FAQs
What documents are required to get a home loan?
Home loan applicants must provide personal documents like PAN cards and Aadhaar cards, income-related documents like bank statements, and employment/business-related documents such as salary slips or profit and loss statements. Additionally, property-related documents are also required.
Is home loan exemption in Income tax 2023-2024?
Under Section 24 of the Income Tax Act, individuals can claim a tax deduction of up to Rs. 2,00,000 on the interest payment of a housing loan. This deduction can be claimed if the house construction is completed within 5 years. Otherwise, a deduction of Rs. 30,000 can be claimed.
How can I clear my home loan payments faster?
Make regular pre-payments, such as once a year, to reduce your outstanding principal and repay your home loan faster. This tip is ideal for those who want to avoid carrying a home loan for a longer term.
Do banks take original documents for a home loan?
Since a home loan is a secured loan, the lender keeps the original property documents, such as title documents, throughout the loan tenure.
