Are you on the fence about borrowing credit to purchase a home? In today’s scenario, taking a home loan is a smart move. We’re such strong proponents of it, that we’ve dedicated an entire article to why you should take a home loan to finance this big-ticket purchase. But, deciding to take a home loan is only the first step. To make a wise, informed decision, it’s important that you understand all aspects of a home loan, one of which is home loan documents.
For any financial institution to feel confident of your loan eligibility and ability to repay, you will have to submit a few documents. These also serve the dual purpose of protecting the lender’s interests, should you default on repayment. When it comes to a home loan, documents required aren’t too many. Typically, you have to provide the following five.
Identity proof
Here you can submit any government issued identity proof. Though your Aadhaar card is preferred, some lenders will also accept your passport, driver’s license, PAN card or voter’s ID.
Address proof
If any of your home loan documents has both your identity and address, you can kill two birds with one stone. However, if your identity proof document doesn’t have your address on it, provide a copy of your electricity bill, post-paid mobile bill or telephone bill to check the address proof box.
Property documents
One of the most important categories of home loan documents are property papers. Typically, you must submit the sales deed, allotment letter and/or stamped sale agreement. You may also have to provide a no objection certificate from the builder or society, proof of payment made to the seller/builder and an occupancy certificate.
Income proof
When it comes to home loan documents, all lenders ask you to submit income proof. However, the list varies depending on whether you’re salaried or self-employed. If you’re salaried, you have to provide salary slips, bank account statements and Form 16.
On the other hand, if you’re self-employed, you have to submit the profit and loss account statement of your business and its balance sheet. This is in addition to your bank account statement and IT returns.
Business documents
If you’re self-employed and applying for a home loan, there are a few extra home loan documents that you have to submit. These are pertaining to your business’ existence and include a few, or all of the following:
- Business profile
- Business PAN
- GST registration
- Income tax returns for the business
- Partnership deed
- Trade license
The thing to keep in mind when it comes to home loan documents is that the list will vary from one lender to another. This list is indicative, and while some financial institutions will compel you to submit all, some will ask you to furnish only a few. In rare circumstances, lenders may require you to submit some extras depending on factors such as a weak credit score.
In a nutshell, the key to a smooth borrowing experience is to pick a lender that prioritizes your convenience and understand from the get-go the documents you’ll have to submit. This way, there are no unpleasant surprises along the way. So, before you settle on a loan provider, shop around. Check not only the housing loan interest rate, but also the ease of application for a hassle-free experience, from start to finish.
Speaking of hassle-free, have you considered buying a home through Zapkey? We make the process stress-free, enjoyable and transparent. See it for yourself!