September 22, 2021

Furnishing adequate documents is an indispensable part of the home loan process. It is through your documents that the lender gathers information about you and assesses your eligibility. Also, documentation helps you keep a record of the money borrowed as well as repaid for purchasing your home. However, often people miss out on submitting the required documents. Even if they do furnish the documents, they are incomplete or dated, which leads to rejection of home loan application. Lenders do not approve your home loan application unless you submit accurate and complete documents. Therefore, before applying you must know the documents needed with a home loan application.

If you wish to apply for home loan, ensure that you do not miss out on these documents.

KYC documents

Your KYC documents are crucial for a home loan. It includes your age, address proof and identity proof. There are various documents that you can furnish for KYC compliance. Some of them like driving license, Aadhaar, etc., can be used as an identity as well as address proof.

Income documents

The lenders ask for your income documents to check your creditworthiness and repayment capacity. It helps them assess if you have a stable source of income to repay the loan. Lenders ask for a copy of the bank statement, passbook and salary slip to verify the inflow of income, and income tax returns. In case of self-employed individuals, additional documents to support the application would be needed.

Property documents

There are some property documents without which you might not be able to get the home loan at all. For example –

  • Chain of ownership

The chain of ownership traces the property to its first owner and identifies how the property has been transferred from one owner to another. It helps confirm that the seller has the right to transfer the property and is the legitimate current owner.

  • Property’s approved plan

This is crucial to ensure that the property is legal and has been constructed in compliance with all the laws and rules in force. When you have an approved building plan, it means that no authority can put an objection to it or demolish it. The approved plan also confirms that the property has all the legal permissions and is authorised by civic authorities.

  • Encumbrance certificate

Encumbrance certificate is crucial to ensure that there are no pending dues or mortgages on the property in question. The lenders ask for this document to know all the details of the transactions carried out about the property.

  • Receipts of tax and dues

Lenders also need to ensure that the seller has no pending dues of the society or authorities. They can also ask for an occupancy certificate which would confirm that the municipal authorities have no objection to the sale and the seller has no pending tax dues. These documents also add as an additional proof of the ownership and possession of the property.

All the lenders more or less have the same set of documents required for a home loan. However, depending on their policy, there could be some additional documents that they could ask from you. While all the documents are equally important, it could be challenging to get a home loan approval without these documents. Therefore, before you apply, ensure to arrange these documents required for a home loan.

Steve Campbell

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