When you are looking to get a home loan approval for the construction or purchase of a home, you will need to submit many documents that prove your eligibility and help you get approval. The documents can be quite a few and confuse you. In this article, we will talk about the documents most required for a Home Loan application.
Documents needed for home loan approval
The most important documents for home loan approval are as follows-
Loan application form- The loan application form of the bank is an important document and detail to submit. The applicant should fill out the loan application form with all the necessary details related to the person, property and other details required. The income terms and the other details of the applicant are a major part of the application form.
Passport-size photographs– The passport photographs of the applicant are also important for the loan application process. The passport photographs help the bank authorities identify the applicant so that they know who to deal with after giving the loan. The passport photographs should be recently taken and match other identity proofs that the applicant provides with the application form.
Identity proof- The bank needs to know that it is giving the home loan approval to a genuine and authentic person who is a citizen of India. The first step to knowing the authenticity of a person and checking his background is getting identity proof from the person. Many documents work as identity proof for the applicant, such as a PAN card, passport or Aadhaar Card for the applicant.
Residence proof – Residence or address proof is also important to cover during the application process. The residence proof also validates that you live in India and are authentic to where you reside. The proof of residence can be the same as identity proof too. Passport and Aadhaar cards often double up as residence proof. However, you can also submit the Voter ID card or Bank passbook as residence proof. If you take a home loan from the same bank as your savings account, this process is quicker and smoother.
Proof of income – To give you a loan, the bank needs to verify your monthly and yearly income. Your monthly income should be stable and able to fulfil the interest put and the amount of loan repayment instalment given every month. For a certain loan amount, there is a minimum amount of salary required for home loan. The proof of income shows that you can repay the loan steadily over the loan repayment period. A certified letter from the employer for salaried employees and their payslips for the last three months should be considered. Proof of income for the self-employed can be Income Tax Returns (ITR) of the last three years. The updated bank account statement is also taken into consideration.
Signature verification– The person’s signature is very important for all transactional and authentication processes of a bank. The verification process is done by the banking professionals of the bank where the application has been made. Some banks may also collect digital signatures and biometric signatures for smart processing.
Liabilities and personal assets– The person must declare his assets and liabilities to clarify his financial position.
Property documents- the details and documents related to the property are also very important for the loan application process. The property documents and details are taken to ensure that the property for which you are taking the home loan is genuine and undisputed. The property verification process may take some time to complete.
Proof of business address- When you are self-employed, the bank will verify the legality and authenticity of the business. It takes the business address and proof of business address to ensure that you have a viable business and can repay the loan properly. This ensures that the business you are talking about is genuine and you are working as a self-employed individual with the right financial credentials.
Proof of Income Tax returns– The proof of IT returns for the last two to three years is also something salaried and self-employed people must give to the bank. The person has to submit tax Returns for the past two financial years if he is salaried. Otherwise, the applicant has to submit Returns/Assessment Orders copies of the last three years as a self-employed professional.
There are other documents an applicant must submit, but these are the most important documents a person should have. The document for NRIs is a bit different from these documents.
The process of home loan approval is an extensive one, but if you have all the documents in order, it can happen swiftly. These days, banks have created better processes and digital portals to approve Home Loans and related transactions. The applicants can even submit digital copies of these documents and expedite the process. If you plan to get a home loan, keep these documents handy and talk to a home loan executive at your nearest bank.