A housing finance lender will approve your home loan application after verifying the necessary documents. Your application will be deemed incomplete if it does not pass the lender’s document verification.
A home loan is a secured loan, so property papers and other essential documents hold critical value. Therefore, KYC documents, income proof, and other necessary documents like property documents are required to process your home loan application.
While the requirement of home loan documents might vary as per different home loan lenders, they are essential to obtain the loan. Most applicants overlook this aspect and often wonder what went wrong when their application is rejected. Incomplete documentation is one of the most common reasons for home loan rejection.
However, applicants must know the following crucial points regarding the home loan documents before applying for a home loan online:
The list of home loan documents may differ between lending institutions.
The documents required for a housing loan application by a salaried or self-employed person vary accordingly.
A salaried employee must provide identity and address proof, along with proof of income.
You must provide documents such as identity, address, and income proof of your co-borrower as well, if applicable
The following is a list of standard home loan documents that financial organizations require to process your loan application. In case of a home loan balance transfer, existing housing loan documents like EMI slips and old or existing home loan application forms are required.
KYC documents for a housing loan
KYC documents are necessary as per RBI guidelines. These give information about the borrower, like their age, salary, address, income tax, employment, etc. Remember that documents related to income for home loans differ slightly between self-employed and salaried applicants.
Documents essential for salaried applicants
- Aadhar Card, Driving Licence, Passport, Telephone Bill, Election Card, Ration Card, or other statutory authority certificates
- Passport, PAN Card, or any distinct Certificate from a Statutory Authority as proof of age
- The last three months’ salary slips, Form 16 for the previous two years, and the most recent six months’ statement from the bank as income proof.
Documents required for self-employed applicants
- Aadhar Card, Driving Licence, Passport, Telephone Bill, Election Card, Ration Card, or any other statutory authority certificate is acceptable as an address proof document.
- A passport, PAN Card, or any other Certificate from a Statutory Authority can be proof of age.
- Income Proof for self-employed applicants consists of company and ITR documents, like business existence proof, last three years of income tax returns, balance sheets certified by a Chartered Accountant, and previous year’s account statements from the bank.
Property documents for a home loan
When buying a property, furnish all applicable property documents with the home loan application. These documents confirm that the property exists, provide proof of sale, and provide supplementary information such as ownership.
Different types of properties may require different types of property documents for the approval of a home loan, i.e., the nature of the property determines the required property documents. The following are the most common documents required:
For real estate builder or developer property
- Allotment letter
- Building sanction plan from the Municipal Corporation/Similar competent authority
- Builder-Buyer Agreement
- Payment Receipt
- Mortgage Permission from the appropriate authority
For resale property
- Sale Agreement
- All prior deeds dating back to the first allotment of the property
- A sale or conveyance deed in the seller’s favour
- Approved property map
- Relevant authority-issued possession certificate and a land tax receipt
- Builder or society supplied Certificate of No Objection (NOC)
In case you are applying for a construction loan, you will need to provide a construction cost estimate as well as a complete breakup along with property documents with your home loan application.
Proof of income for a home loan
NBFCs or financial institutions carefully examine the loan applicant’s income and financial history to determine the applicant’s home loan eligibility and repayment capacity. It is why they demand authentic records which prove the consistent monthly income of the home loan applicant.
Home loan applicants must provide the following documents to demonstrate that they have a regular monthly salary. These determine the borrower’s ability to repay the loan:
- Previous three months’ salary slips
- Bank account statements of the home loan applicant for the last six months, Form 16 (Part A & Part B), and Income tax returns for the previous two years
- Appointment Letter, Employer Certificate, or Increment Letter for employee identification
As we can see, there are a number of property documents that are essential for a home loan. By having all of these documents ready before you speak to the lender, you will save yourself a lot of time and hassle while at the same time, making the entire process much simpler. Purchasing a home implies financial stability. If looking for affordable housing loans, apply for a home loan online today.