[ecis2016.org] Although the type of documents that a home loan applicant needs to provide, may vary from lender to lender, there are some basic documents that all lenders will insist on
While planning to take a home loan, it is imperative to be aware of the documents that are required for the application. Here’s a look at the basic paperwork that applicants need to prepare for.
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Home loan application form
This is the basic document for the home loan, where the applicant will have to fill all the details. If there are more than one applicants to the home loan, the details of the co-applicants will also need to be furnished. You will have to attach/paste your photograph, as well as that of the joint applicants. You also need to pay the processing fees along with the home loan application. As this fee is generally non-refundable, you should avoid making applications to multiple lenders.
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Identity and address proofs of the borrower
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For the purpose of identity, lenders accept documents like PAN card, a valid passport, Aadhaar card, driving licence, identity card issued by any government department, identity card of your employer, or voter identity card.
For address proof, the documents that are generally accepted, include the Aadhar card, voter identity card, a valid passport, driving licence, utilities bills and recent bank statements with the applicant’s address printed on it.
An applicant’s home loan eligibility is established, purely on the basis of his income. For salaried persons, lenders generally ask for the Form No 16 and/or a copy of his income tax return with computation of the total income. The lender may also ask for the applicant’s latest salary slips, to ensure that he is still working with the same employer and that his income has not undergone any negative change.
For self-employed people, lenders usually ask for the last three years’ income tax returns with computation of total income. The bank may also demand copies of audited profit and loss statements and balance sheets, for the last three years. In case the accounts are not audited, you may have to get these documents certified by a chartered accountant. For self-employed professionals, the lenders will also insist on proof of educational qualification. In both cases (salaried and self-employed) the lending institution will also ask for copies of the bank statements where your salaries are credited or your business transactions take place, to verify the authenticity of your income.
Documents pertaining to the property
It is not necessary for you to identify the property, before making a home loan application. Ideally, the loan application should be made before you identify a property. Doing so, will help you to sort out any issue pertaining to eligibility, whether it is related to the quantum of the home loan, or any incorrect information related to your credit score or credit history.
Once you have identified the property that you intend to purchase, you will have to submit the documents related to the property. If you are buying a resale house, you will have to provide the copies and originals of all the documents constituting the chain, from the first buyer till your present seller. This will help the lender to establish that the property is not already mortgaged. In case the property is in a cooperative society, you may have to furnish a no-objection certificate from the society.
If you are buying the property from a developer, you will have to provide documents that establish the clearances obtained from the local authorities, the approved building plan, documents about ownership of the land, legal opinion about title of the land, etc.
(The author is a tax and investment expert, with 35 years’ experience)
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