Your home loan eligibility is determined mainly by your income and repayment capacity. Other important factors include your age, qualification, number of dependents, your spouse’s income (optional), assets & liabilities, savings history and the stability & continuity of occupation.’
Proof of Income: IT returns for the last 3 years, Bank statement for the last 6 months, salary slips or certificates
Age and Address Proof: Any one from the following – Driving License, Passport, PAN card, Voter ID.
Identity Proof: Driving License, Passport or PAN card
Employer Details: If you are not working with Government or in an MNC, you will need to provide information regarding the nature of your employment, financial status and turnover of your company, etc.
The forms and statements submitted by you determine whether you are eligible for a home loan or not. Each document would be carefully scrutinized for eligibility. If you run a business or are a working professional, the banker evaluates your bank account statement to determine your financial health. You are advised to keep a healthy bank balance as opposed to having few or insufficient funds which could work against you. Frequent cheque bounces could also affect your standing. Most banks will charge an upfront processing fee which ranges from 0.25%-0.5% of the entire loan amount. There could also be administrative and legal fees, however, most reputed residential projects are approved by banks where the terms, conditions and fees would be flexible.
Yes, please ensure they are. Banks carefully verify all information submitted by you including your residential address, place of employment and employer credentials
If the banker is satisfied with your application and credentials, you will be getting a home loan to buy the desired property. You will be issued a home loan sanction letter or a home loan offer letter which could be unconditional or bound by certain criteria that you have to fulfill. The home loan offer letter contains the loan amount, rate of interest, whether the rate of interest is fixed or floating, the tenure, repayment schedule and other details.
Yes, the Agreement of Sale between the builder and the purchaser is considered the mother document by the bank. This document will be scrutinized by the bank’s legal team thoroughly. Even if you qualify financially, unless the legal scrutiny is bypassed, the loan may not be disbursed. If the document found is clear in all aspects, the lawyer will give a go ahead. Sometimes, legal experts may demand additional documents.
Yes, you are required to hand over the entire set of original documents pertaining to your property to the bank. If the property is pre-approved, this may not be necessary, as the banker would already be in possession of the above said documents. Otherwise, all the original documents pertaining to the proposed property have to be submitted. This normally includes link documents related to the land, sanctioned plans, building plans, architect’s certificate, NOCs from the concerned authorities, etc.
Banks will send an expert to visit the premises you intend to purchase. Normally this job is done by Civil Engineer or an Architect or in certain cases, a senior employee. The main aim of this evaluation process is to ascertain the progress of construction. If the property is under construction, the field investigator’s job is determine the stage of construction & to verify the same as mentioned in the payment notice issued to you by the builder.
Yes, banks carry out an independent valuation to determine whether the purchase is in accordance with the existing market price of the area where the scheduled property is located. Valuation is keyin determining the loan amount that can be sanctioned by the bank.
After the legal scrutiny, technical scrutiny and evaluation, the draft documents need to be registered by the Sub-Registrar’s office. All the relevant fees are to be borne by the buyer.
Banks typically finance up to 80% of the property value which means that you have to contribute at least 20% of the property value from your own funds. Before the loan is disbursed, you need to provide proof in terms of receipts to show your contribution. Usually, loans are disbursed on the basis of the stage of construction. In case it is a resale or ready-to-move-in property, the disbursement is done in full and final. In case of partial disbursal, you will be charged interest only on the amount that has been released till date and not the whole amount that the loan was sanctioned for.
In the situation that the loan amount is not sufficient, you can club your income either with that of your relatives. Banks also allow you to club your income with your spouse’s who could then come in as a co-applicant.
If you are employed, you can provide your latest salary slips showing all deductions for the past 6 months. You will also need to obtain the Form 16 from your employer for the last 3 years. If you have been in your current job for less than a year, you will need to provide your employment history over the last 5 years.
You can submit the following documents: