According to SBI reports, bank credit has witnessed a 14.4% increase in the share of housing loans in June 2022. Indeed, home loans are the best financial products to address the rising demand for residential properties currently. The crucial factor leading this growth is easy availability of funds at affordable rates. Borrowers simply have to fulfil eligibility criteria and submit necessary documents required for home loan for salaried persons as well as self-employed individuals.
List of documents needed to avail home loans
While the requirements may vary with loan providers, below is a tentative list to follow:
- KYC documents like Aadhaar card, PAN card, voter ID, passport or driving license. These serve as proofs of address and identity.
- Income proof which assures a borrower’s financial strength and hence, loan repayment capability. The documents required for home loan for salaried persons are latest salary slips. The same for self-employed applicants are P&L statements.
- Proof of business, especially for self-employed individuals, like trade license, GST registration certificate, import/export code, etc. These documents must indicate that the business vintage is at least 5 years. Self-employed individuals can check out the complete list of documents for home loan for self-employed applicants.
- Bank account statements of previous 6 months to show the latest transactions that happened.
- Property documents which include allotment letter or sales deed, title deed, NOC from builder or housing sector, detailed cost estimate for construction, possession certificate, land tax receipt from revenue department, occupancy certificate in case of ready-to-move-in properties, etc.
During the verification process, housing loan providers may seek additional documents as required. Applicants must submit everything they require or talk to the provider regarding unavailability of document, if any, to avoid rejections.
Why are documents necessary?
Documentation is an imperative part of the loan sanctioning process, where borrowers need to submit their specified documents to the providers for availing the credit. These enable loan providers to understand and verify an applicant’s personal details as well as financial stand. The papers also establish an individual’s credibility to repay the borrowed amount in time. No lender provides home loans without completing the documentation process satisfactorily, even if the applicant qualifies as per home loan eligibility criteria.
What happens if applicants cannot submit the documents accurately?
If prospective borrowers fail to submit certain documents or provide invalid and old papers, their loan application is likely to be rejected. At best, the lender will refrain from offering exclusive benefits. Below are some possibilities in this instance:
- The borrower may not get the actual loan amount required and hence, have to pay a huge down payment from their pocket.
- They incur extremely high rate of interest on the housing loan, making it expensive to afford.
- The associated charges like processing fees, statement charges, penalties, etc. may also increase
- The terms and conditions are stricter with no flexibility for convenience
- In extreme cases, the loan application gets rejected completely
Correct documentation is one of the important tips for smooth purchase of a home. Leading housing finance companies ask for minimum home loan documents required to sanction the fund. Borrowers must ensure to provide all those valid papers accurately and updated. If they are an existing customer, they can opt for pre-approved offers which require a few to no documents for the advance.
Pre-approved offers are personalised to simplify the loan application method and make it faster. Such schemes are available on a plethora of financial products, including home loan, loan against property and others. To check their pre-approved offers online, borrowers need to share some basic details like name and phone number only.
Once applicants are ready with the documents and have met the eligibility criteria, they can apply via an online form or through pre-approved offers to initiate the home loan process. Reputed HFCs nowadays offer a verified list of approved projects from where they can choose the most suitable property for them.
