Here's a Quick Checklist of all the Documents Required for Availing a Home Loan

A home loan is a secured loan opted by purchasing a property while pledging it as collateral. Home loans offer high-value funding at affordable interest rates for the long-term. Home loans offer assistance to enable borrowers to meet their personal or financial goals. So, an applicant must collect all the necessary documents required for home loan when applying for it.

List of Home Loan Documents
Following are list of documents required while opting for a home loan:

1. KYC documents

● Identity proof (PAN card, Aadhar card, passport, driving license, voter ID card)

● Address proof (Passbook or Bank Statement, Ration Card, Telephone Bill, Electricity Bill, Employment Letter)

● Age proof (Birth Certificate, PAN Card, passport,and driving license)

2. Income proof

Financial institutions or NBFCs properly verify the income history and financial background of applicants to determine their home loan eligibility and repaying capability. This is the reason financial institutions require genuine financial documents of the applicant.
Loan applicants need to submit the following documents to clarify their stable monthly income:

● Current salary slips of previous three months

● Bank account statement of last six months

● Form 16 and filed Income Tax Returns of last two years

● Increment Letter, Appointment Letter, and Employer Certificate

● Employee Identity Card

3. Property documents

Among the documents required for home loan, property documents play a vital part. These property documents include:
● Commencement Certificate

● Registration receipt

● Sanction Letter

● Allotment Letter

● Approved building plan copy

● Payment receipts to builder

● Society Share Certificate

● Copy of electricity bill

● Society maintenance bill copy

● Society Registration Certificate

● NOC (No Objection Certificate) from society

● Chain contract from former owner

● Registered agreement for sale

● Property Insurance copy

● Occupancy Certificate

Eligibility Criteria for a Home Loan

Home loan eligibility criteria differ from one lender to another. Moreover, the parameter relies on the employment of the borrowers. Some of the important criteria are as follows:
● For salaried individuals

● The borrower must be an Indian citizen.

● Applicants should possess at least3 years of working experience.

● The age range must be between 23 and 62 years.

● CIBIL score has to be 685 or above.

● For self-employed individuals

● The borrower must be an Indian citizen.

● Must have at least 5 years of working experience.

● The age range must be between 25 and 70 years.

● CIBIL score has to be 685 or above

Advantages of a Home Loan
Following are the beneficial factors of a home loan:

● Easy repayment
There is no need for potential applicants to repay their housing loan amount in full settlement. Instead, borrowers can clear the total amount in monthly instalments. Since instalment amounts are lower than monthly earnings of applicants, they can pay it off without hassle. However, the repayment tenure is selected based on age and the years remaining until the applicant's retirement.

● Reasonable interest-rate
Another important beneficial factor that makes home loans unique is their rate of interest. Even though interest ranges vary from one lender to another, it generally ranges between 7% and 12%. Hence, a borrower must select a lender who can provide him/her with the ideal interest rate in the long run.

● Reduction in risk for lenders
When it comes to repaying a loan, a lender falls in jeopardy if the borrower misses the mark to pay back the credit amount. However, since a home loan is secured, an applicant must keep his/her house as mortgage. This means the lender can take back money by selling that house if the borrower fails to repay the loan.

How to Apply for a Home Loan

These days home loan has become a vital financial instrument for potential borrowers. Following are the steps to apply for a home loan process:

Step 1: Visit the website and click on apply online option.

Step 2: Fill out the loan application form.

Step 3: Upload the necessary documents.

Step 4: Pay the processing fee.

Step 5: Wait for the evaluation of your documents and approval.

Step 6: You will receive the sanction letter from your lender after your loan’s approval.

Step 7: Valuation of your property by a legal check.

Step 8: The final loan deal.

Step 9: Signing the agreement with the financial institution.

Step 10: The loan amount will be credited.

Lastly, before applying, an applicant must be aware of all the documents required for home loan and read all its necessary terms and conditions. Keeping these documents handy while applying will help reduce the hassles of application and also lead to a faster approval.