Buying a home or any real estate property is a crucial decision in anyone’s life. Often, individuals want to purchase a home but don’t have the required finances. In such a case, an individual can opt for a home loan from a reliable lending institution and fulfil their aspiration. However, there are several conditions for acquiring a home loan. Apart from the terms and conditions, individuals are also required to submit documents to get a home loan. These documents can range from ID proofs to salary slips. Also, the documents for a home loan can change from one lender to another. However, some documents are common and are essential for acquiring a home loan. Read on to know the essential documents for a home loan in India.
General documents required for a home loan in India
The most important is the home loan application itself. All lenders ask applicants to fill the loan applications with individual details. Usually, traditional lending institutions ask individuals to submit a physical copy of the loan application. However, a new-age and reputed lending institutions like Grihashakti allow individuals to submit their home loan applications online. All details in the loan application should be filled out accurately. Withholding any information or providing wrong information in the home loan application can lead to the rejection of a home loan request. Along with the home loan application, several self-attested copies of documents are attached. Documents required for home loan for salaried applicants are made known by the lending institution on their website. Since home loans are secured, they are offered to salaried or self-employed individuals. The general documents required for home loans for salaried individuals are as follows:
- PAN card
- Aadhar card
- Voter ID card
- Driver’s license
While submitting the loan application online, these documents are uploaded in digital format. Digital copies can be quickly and safely uploaded on the online loan application portal. Ensure that the uploaded documents are original copies, self-attested, and updated according to the latest regulations. A lender can ask for any one of the ID proofs for giving a home loan. For example, individuals may have to submit any one between the driver’s license and voter ID card.
These documents required for a home loan for salaried applicants are compulsory. Every lender has to collect these documents from customers according to the KYC (Know Your Customer) regulation. KYC rules set by the government of India restrict lenders from offering loans without knowing their customers. For the same reason, the lenders demand these documents before approving a home loan application. Apart from using a home loan calculator with prepayment, individuals should also check the required documents for the loan.
Documents to showcase the income/salary
Lenders want to know the exact net monthly salary of the applicant. Net monthly salary is the salary left after monthly bills and deductions. Lenders also view the detailed expense report of the individual applying for a home loan. Lenders do this to know the applicant’s repayment capacity before approving the home loan amount. A home loan has to be repaid to the lender via EMIs. Without a strong repayment capacity, an individual may default on repayments. For the same reason, lenders demand several documents to check the income/salary of the applicant. Salaried individuals will have to produce these documents for acquiring a home loan:
- Salary slips for the previous three months
- Salary bank account statements for the previous six months
- Form 16
- Income tax returns for the last few financial years
- Employment contract and appointment letter for individuals with an employment period of less than a year
Self-employed individuals also have a monthly income and are eligible for home loans. The documents for self-employed individuals to acquire a home loan are as follows:
- Income tax returns for the past few financial years
- Audited balance sheet and profit/loss statement for the company/business
- Proof of secondary income (if any)
- Bank statements of all the accounts for the past few months
Documents to showcase proof of property
Since home loans are offered to purchase a real estate property, several documents are required by the lenders. Lenders have to be sure that the applicant is buying a real estate property with the home loan amount. The allotment letter, buyer agreement, and proof of payment to the seller/builder are required for a new home. Title deeds, payment receipts, and the draft agreement are required for a resale property.
Apart from the above documents, a few more documents can be required for a home loan. Also, two passport-size photographs (recent) are required along with the loan application. Check the documents required for a home loan for salaried applicants with your lender and arrange them beforehand. Apply for a home loan with all the required documents right away!