Home loans are secured loans that home loan buyers can avail of to ease the financial burden of buying a home. Home buyers can approach lenders and request up to 75% to 80% of the home’s value they are planning to buy as home finance or home loans. This home loan can be repaid over 30 to 40 years and lenders have the flexibility to choose their repayment tenor based on their repayment capacity and creditworthiness. The borrower also becomes eligible for home loan tax benefits on both payments made towards the repayment of the principal as well as the interest part of the loan.
Home loans ensure liquidity and also guarantee the due diligence that must be carried out before someone invests in a high-value asset such as a home. If you are planning to secure home finance to ease your financial burden and make your dream of owning a home a reality, you must make sure you meet the home loan criteria as well as have all the documents required for home loan ready with you.
Documents Required for Home Loans
Here are the documents you will need to submit to be considered eligible for a home loan in India:
1. You will need to submit a property-filled home loan application form along with recent passport-size photographs of yours.
2. Your lender will also ask you to submit identity and residence proof documents. Under these categories, lenders accept several documents, including Aadhar, PAN Card, Passport, Driving License, Ration Card, etc.
3. No lender will sanction you a home loan without verifying your repayment capacity or creditworthiness and ensuring you meet the home loan eligibility criteria. To assess your repayment capacity, lenders will ask you to submit income documents, such as salary slips, Income Tax Returns, challans as proof of advance tax payment, employee cards, proof of business documents, P&L statements, etc.
4. You will also be asked to submit all property documents for home loans. This includes all documents related to the property you plan to pledge as security or against which the loan is being taken. Under this category, lenders generally ask for a share certificate, Deed of Sale or Sale Agreement, allotment letter from the society or the housing board, NOC from all the concerned departments, etc.
Home loans involve substantial funds and therefore, lenders do their due diligence before sanctioning a home loan. To do their work properly, financial institutions ask for several different documents. Your lender may ask you for several more documents over and above the ones listed here. So, if you are planning to secure housing finance, speak to someone from the bank or NBFC you plan to avail of a home loan from and request them to share with you the full list of documents required for home loans. This will help you navigate the entire home loan process smoothly.
Other than keeping all the home loan documents ready, you must also read about the home loan eligibility criteria if you want to enjoy quick loan approval and negotiate for beneficial loan terms and conditions.
Housing Loan Requirements: Home Loan Eligibility Criteria
If you want to secure a home loan on the best possible loan terms and conditions, make sure to meet the home loan eligibility criteria. To secure a home loan, you must meet the following home loan eligibility conditions:
1. You must be an Indian citizen. Many banks and NBFCs offer home loans to NRIs as well but the process is more complicated for them.
2. The property you are buying with the loan money and which will serve as collateral must be in your name and you must have all the property papers in your name as well.
3. Your credit score must be in the range of 750 to 900. Such a credit score indicates a healthy attitude towards credit repayment and therefore, people with a good credit score get approved for loans quickly. If your credit score is below 750, you must immediately start working on your credit rating and apply once your rating has improved.
4. You must comply with your lender’s age requirements for home loans. Ideally, all lenders set home loan age requirements at 21 to 65 years of age.
