For any middle class Indian the decision to purchase property is a life altering one the first time around. While the mental preparation is something that requires a lot of time, it is the physical preparation of documents that sends a shiver down the spine – it is tedious, it is tricky and time consuming. The way out is however, not to get bogged down and go about the arrangement of your documents methodically.
The bank that is giving you a home loan needs to be completely sure of your financial health before it agrees to get into a long term lending relationship with you. This is why the process of mortgage application requires you to put together quite a few documents. The process may be unpleasant, but you must understand that it is necessary to do it properly. Here is a list of documents that you will need to put together while applying for a home loan.
1. General list of documents:
1. A Completed loan application
2. 1 passport size photograph (including the one affixed in loan application)
3. Proof of identification: Electoral ID Card / Passport / Driving License / PAN card.
4. Proof of residence: Electoral ID Card / Passport / Electricity Bill / Telephone Bill.
5. Proof business address, in case of non- salaried borrowers
6. Statement of bank account for the last six months
2. For salaried individuals the following must be put in order:
1. Salary slips for last 3 months
2. Bank statement for last 3 months
3. Copy of identity card issued by the employer.
4. Form 16 or IT Returns for the last 2 years
3. Self-employed individuals and businessmen must have the following ready:
1. Photocopies of IT Returns/Assessment orders for the last 3 years
2. Balance sheet and Profit and Loss A/c for the last three years (Certified true
Copy attested by Chartered Accountant)
3. Proof of business address.
4. Proof of business (Registration Certificate of establishment, Gumasta /Trade
License, Sales Tax Registration etc.)
5. Certificate of Practice-photocopy.
6. TDS Certificates (Form 16A wherever applicable)
4. If a flat is being purchased from the builder, the following documents will be required
1. Original copy of agreement for sale/ sale deed with the builder
2. 7/12 extract issued by the land authorities
3. Property register card, which is obtained from the City Survey Department
4. N.A. permission for the land from the collector,
5. Search Report and Title Certificate
6. Development agreement between owner of land and the builder
7. Copy of order under the Urban land Ceiling Act
8. Copy of building plans sanctioned by the competent authority
9. Commencement certificate granted by the Corporation
10. Building completion certificate
11. Latest tax receipts paid towards the land or property or flat to be purchased
12. Partnership deed or memorandum of association of the builders firm
5. If the property being purchased is located in a Cooperative Society
1. Allotment letter from the Society in your name
2. Original share certificate provided the Society
3. Certificate of the registration of the society
4. No objection certificate from the society
5. 7/12 extract or property register card in the Society’s name
6. Copy of N.A permission for the land from the collector
7. Search Report and Title Certificate
8. Copy of order under the Urban Land Ceiling Act
9. Copy of the building plans sanctioned by a competent authority
10. Commencement certificate granted by Corporation
11. The latest receipts of taxes paid for the property
12. Original to assign / Deed of assignment
6. CIBIL report and CIBIL score
You must ensure that at least six months prior to your applying for a home loan, your CIBIL report is in order without any blemishes such as missed or late payments, your outstanding loans are cleared, and there are no other discrepancies in your CIBIL report. Your CIBIL score should be at least 750 and above for you to qualify for a home loan at competitive rate of interest.
7. Lender’s rigmarole
As we mentioned earlier, a home loan is a long term relationship that a lender agrees to get into with you. It is therefore only fair that the bank will try to assess your creditworthiness in every possible way. Understand their disbursal procedure and be prepared to answer the questions that they may have for you and the home visits that they may need to make. Patience is the key through all of this.
8. File it properly
Lastly, keeping all your documents ready in the above mentioned order, in a neat file, before you make your loan application is a good idea and will cut your hassles down completely. There may be a few extra documents that differ from bank to bank, but if you have the above mentioned documents in order, you will only be required to make a few tweaks here and there.
Being adequately prepared with the documents for your home loan, is a prudent move and will ensure that your loan disbursal is speedy and hassle free.