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All banks have a set of home loan rules and regulations which are almost uniform over all banks; only a few specifications may vary. Apart from the documents, there are also various factors that determine your chances of getting a home loan.
Documents Required for Home Loan
Below mentioned are the different factors that determine your home loan availability.For identity verification, you will require any of the mentioned documents - Bank Passbook, Employee id, Voter’s ID card, Pan card, Passport, Driving License. Age proof For age proof, you will require - Birth Certificate, Bank Passbook, PAN card, 10th class mark sheet, Driving License, Passport. Address proof Bank passbook or bank account statement, Voter’s I card, ration card, passport, any kind of utility bill (electricity, gas, water, telephone bill) Income proof for salaried employee If you are a salaried employee, you will need to show your salary slips for 2 months, increment or promotion letter, Form 16 , Income tax returns for 3 years.Apart from income proof, you will need to show investment proofs – which can be fixed deposits, investments in shares or mutual funds. Income proof for self-employed If you are self-employed, you need to mention a brief of his profession, last three years income tax returns with computation of income signed by a Chartered Accountant.Last 3 years profit & loss balance sheet duly signed by a Chartered Accountant. Property documents In the property documents, you need to include the following -
Agreement of sale from the builder, possession certificate, land and location sketch, land or building tax paid receipts, letter of allotment, original proof of any advance payments made towards the purchasing of the property, NOC (no objection certificate) from the housing society or builder, detailed estimate of the construction of the house.
Other than these documents, there are also few factors that affect the sanctioning of home loan.
Your CIBIL score
A higher CIBIL score enhances your possibility to get a home loan and having one before applying for the loan adds weight to your home loan application process .So, it becomes necessary to repay all your debts, including credit cards or any previous loans on time to have a good credit score . Any outstanding debts or delay in payments affects the CIBIL score negatively leading to the cancellation of home loan.
Adding a co-applicant
The co-applicant can be your financially independent spouse or any of your children. A co-applicant with a higher CIBIL value can help you increase your chances of getting a home loan ; this will help you to get a higher loan amount and will also reduce the EMI outflows. You can also reap higher tax benefits as compared to a single applicant.
Final Words
Before you leap for a home loan, it is necessary first to analyse your repayment capacity that depends upon your income and your investments so that it doesn’t end up to be a costly affair. You should consider exploring alternative options such as adding a co-applicant to increase your chances of securing a loan at competitive rates.
FAQS - FREQUENTLY ASKED QUESTIONS
How to get home loan approved easily?
To obtain a home loan easily, it is advisable to have all the necessary documents ready. These include age proof, income proof, address proof, and home documents. The list of documents for each category is mentioned above. Additionally, having a high Cibil score and adding a co-applicant can make the loan application process smoother.
What is the minimum cibil score required for a home loan ?
There is no universal specification of a score. It differs from bank to bank what they consider to be a benchmark for getting a loan. However, aCibil score of 600 or below is generally considered low. It is often recommended to maintain a Cibil score of 700 or above to receive favourable terms.
How to check home loan eligibility ?
Your eligibility for a home loan depends on various factors such as age, financial position, credit history, credit score, and other financial obligations. If you would like to determine the amount of loan you are eligible for, you can click here.
Can we get home loan without ITR ?
To obtain a home loan, income tax returns for the past three years are typically required. However, some banks may offer loans without income tax returns, but only if your income falls below the taxable limit of Rs. 2,50,000. However, this can complicate the application process and require additional documents.
Additionally, the bank may charge higher interest rates and your loan-to-value ratio may be low, which means you will need to pay a larger down payment. It is generally advisable to apply for a loan with income tax returns to ensure favourable terms and an easier process.
What documents are collected from bank after home loan closing ?
After closing a loan, it is important to obtain a "no dues certificate" from the bank. Additionally, collect important documents like sales deed, title deed, loan agreement, and power of attorney that were submitted during the loan application process.
What happens after bank approves home loan ?
After the bank approves the loan, you will need to sign a loan agreement. This agreement specifies the loan terms, such as the amount, interest rate, and time period. Once the agreement is signed, the loan is disbursed either to the borrower's account or directly to the seller's account.
Can a bank reject home loan after approval ?
Yes, even after approval, Bank can reject your home loan application due to reasons such as discrepancies found in submitted documents, sudden drop in CIBIL score, change in borrower's financial situation (e.g., job loss), and legal disputes related to the property.
Who can i add as a co-applicant to my loan application ?
Adding a co applicant to your home loan comes with a few terms and conditions. According to banks, there are only a few relations that can be applicants on the home loan. Eligible combinations include husband and wife, father and son, father and unmarried daughter, mother and son, mother and unmarried daughter, brother and brother. Anybody outside of these combinations aren’t eligible to be co applicants. 2 sisters or married daughters and parents cannot be co applicants. Banks also don’t allow friends, partners, other family members, colleagues, etc. to be co applicants. Adding someone as a co applicant should only be done after careful consideration, though. As their credit score, income data, financial habits, ownership in the property, etc. are also going to affect the interest rate as well as whether your loan application is accepted or not.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
