Required Documents for Home Loan

Documents Required for Home Loan in India

Having a home of your own is no more a dream, it is possible at the finger tip of each us. Get a home loan to build your dream home. Here is the list of few banks document requirements and other details mentioned for applying for a home loan.

Checklist of Documents Required for Home Loan

  • Identity Proof: Passport/ Driving License/ Voter ID/ PAN
  • Address Proof: License/ Registered Rent Agreement/ Electricity Bill (up to 3 months old), Passport
  • Employment Appointment Letter: Required if the current employment is less than 1-year- old
  • Financial Documents:

    o 3 month salary slip

    o 6 month bank statement

    o 2 year Form 16

List of Common Documents

  • Complete Home Loan Application Form with one passport size photograph.
  • Photo Identity Proof: Passport/ Driving License/ Voter ID/ PAN
  • Residence Address Proof: License/ Registered Rent Agreement/ Utility Bill
  • Residence Ownership Proof: Sale deed or rental agreement
  • Income Proof: salary slip, bank statement and Form 16
  • Job Continuity Proof: Appointment letter at employment and validation letter from HR
  • Bank Statement: Past 6 months’ document
  • Property Documents: Sale deed, Katha, transfer of ownership
  • Advance Processing Cheque: A cancelled cheque for validation of bank account
  • Investment Proof: LIC, mutual funds, property document etc.
  • Financial Documents:

    a. For Salaried Individual: 3 month salary slip, Form 16 and bank statement

    b. For Self-Employed Individual: IT returns for last 2 years along with computation of income tax for past 2 years certified by a Chartered accountant

    c. For Self-Employed Non- Professionals: IT returns for last 3 years along with computation of income tax for past 2 years certified by a Chartered accountant

Documents Required for Salaried Individual

  • Loan Form: Bank loan application form to be filled with passport size photographs affixed
  • Address Proof: Leave and License/ Registered Rent Agreement/ Utility Bill (up to 3 months old), Passport
  • Identity Proof: Passport/ Driving License/ Voter ID/ PAN
  • Income Proof: 3 month payslips, 2 years Form 16, Copy of Income Tax PAN
  • Bank Statement: 6 months bank statement that shows salary from the employer and any EMI paid for outstanding debit.

Documents Required for Self Employed– Professionals

  • Identity Proof: Passport/ Driving License/ Voter ID/ PAN
  • Address Proof: License/ Registered Rent Agreement/ Utility Bill
  • Office Address Proof: Property Documents, Utility Bill
  • Office Ownership Proof: Property Documents, Utility Bill, Maintenance Bill
  • Business Existence Proof: 3 years old Saral Copy, the Company Registration license, Shop Establishment Act
  • Income Proof: Latest 3 years Income Tax Returns including Computation of Income, Profit & Loss Account, Audit Report, Balance Sheet, etc.,
  • Bank Statement: Past 1 year bank statement
  • 1 passport size color photograph

Documents Required for Senior Citizens/Pensioners:

  • 1 passport size color photograph
  • Photo Identity Proof: Passport/ Driving License/ Voter ID/ PAN
  • Residence Address Proof: License/ Registered Rent Agreement/ Utility Bill
  • Age Proof: Pan Card or Passport
  • Income Proof: Pension Returns Or Bank Statement

Documents Required for Home Loan Balance Transfer

There are many reasons why people transfer their home loan from one financial institute to another. Most prominent reason is lower interest rate which saves cost of borrowing. You must identify the objective of transferring the loan before actually doing it. The process of home loan balance transfer is not much different than applying for the home loan. That is the reason why documentation part is very important for transferring the home loan from one financial institute to another. The process not just includes the documentation but also the validation of documents. The documents are r validated by the bank or NBFC that you apply to. One has to accept that the reliability of a person for repayment is decided from the documents that the person has to offer. The documents of the applicant will describe if he/she will able to repay the loan amount or not. The prerequisite key documents for home loan transfers are the following:

  • Passport-size photographs
  • Filled application form for loan transfer (of the bank / NBFC)
  • Latest three months' Salary Slips indicating break up of Gross salary that is the Basic Pay, House rent and Net Salary after deductions, if any.
  • Six months' bank statement, reflecting salary credits updated within 15 days before the loan application.
  • Identity Proof (Any One): Pan Card, Passport/ Driving License / Voter's ID card / employee identity card (as identity proof and signature proof in case of government employees).
  • Proof of address: utility bill/ voters ID/ Aadhar card.
  • Proof of Age (Any One): 10th or 12th Marks Cards/ birth certificate/ PAN Card / Voters ID Card.
  • If you are a self-employed professional or businessperson, then instead of Points (3.) and (4.), you need to provide documents proving the existence of your business (for businesspersons) and academic qualifications (for professionals) ; and financial statements for both.
  • Bank statements from wherein the home loan EMIs were deducted amounting to last 12 months of the account.
  • The Loan statement copy and complete set of documents relating to the property that is currently in possession of the present home loan lender

Well, banks & financial institutes ask for numerous documents because of following reasons:

  • To know the nationality & age of the applicant. Age is important as home loan is long term loan & the person should be at the age of repayment till the loan is over.
  • Financial documents clearly state all the records that you have. For example, if the current loan’s EMI was not paid on time it will be traceable from bank statement.
  • Credit score is easily verifiable from the list of documents that you are supposed to submit for loan transfer. If your credit score is not as per the requirement of bank of NBFC they will reject the application
  • Monthly income can be determined easily from the employment & business documents. It is very important for bank/ financial institute to make sure that you are eligible for the loan & you will able to repay t on time.

Why is income proof necessary for a mortgage loan?

When you are looking for a Home Loan you must be looking for lump sum money. Mortgage or property loan is the easiest form of loan that can be a help here. In mortgage loan you need to mortgage one of your assets say land to the lender. You get a lump sum amount of money against the asset you are mortgaging. Now the question is why should one need an income proof to avail such loan?

Mortgage Loans are easy to avail but it is not easy to access in case of dispute. According to the guidelines of mortgage loan if the borrower fails to repay the loan amount then the lender can easily cease the asset that is being mortgaged. The lender put the asset on sale and realise the money. But in case of asset, if we consider it as land, it is not easy to sell it off so quickly and realise the money. Hence the lender checks on borrowers’ income proof so that they can be sure of the EMIs. There is also a possibility of lowering down the property value in future, so it gets risky for the lender in mortgage loan. 

What is a Patta?

If you own a piece of land then Government issues a legal document as a proof of ownership of the land. This piece of document is called Patta. Patta generally issues in the name of the owner of the land. But government issues Patta only for those properties which are in constant use. As for example if your land is unproductive then you can’t get the Patta for it. You will only get the document issued if there is any house or building built on it.

If there are multiple owners for a single plot then a single Patta is being issued for all the owners. But in that case the there must be a division of the property. If there is an undivided land Patta will not get issued.

Is it compulsory for every property owner to have a Patta?

Patta is a legal document and definitely it has immense importance when it comes to property dealing. It is an important ownership record that is required to set up right of ownership for the owner of the particular land under the law. Also holding a Patta will make things much easier, especially the government’s compensation from the plot and such will become much easier for the owner.

Patta, on the other, works like a Will Draft. Those who don’t have any Will Paper before his / her death then the land ownership will be automatically transfer to the next family member if the deceased person held a Patta for the land. There will be a small name transfer and renewal process that one must go through to transfer the name (s) of the Patta holder.

Where can we obtain Patta?

Patta is issued by the administrative authority or Tehsildar of the district. There is a small process of obtaining the Patta. The owner (s) has to submit an application or requisition along with necessary documents and details of the owner. There might be an interview of the owner or verification and inspection of the land and the owner. There is a specific format of the required details that the owner has to follow during the process of obtaining Patta. The authority will enquire and do survey of the land as well. The Patta does not need annual or monthly renewal. The renewal takes place only at the time of name transfer.

Home Loan Application Form is the first basic step to start the processing of home loan, post validation of all details in the application form the bank with process the loan and will let you know the next steps to make your dream come true.

What is Khata?

Khata is one of the essential legal revenue documents. It is required while authorizing any property for trade. Khata is basically an account of a person who is having a property in Bangalore which contains the tax details of the property. This Khata i.e. account is basically with Municipal Corporation.

Khata (account) contains all the details related to the property which includes the property’s owner name, property size, location of the property and all the other details which are required for filling the property tax. In Bangalore, Khata decides evaluation of the property’s owner. In Khata the nature of property is also mentioned like whether the property is commercial or residential in nature. As when this is mentioned in the Khata it becomes easy in Licensing and for using it for trade purpose and to acquire Loan on it.

Details which a Khata contain are:-

  • Name of the owner.
  • Location of the property.
  • Plot number.
  • The number of the floors.
  • Area and size of the Property.
  • The day of establishment and some more.

All the above mentioned details are very important for filling the Property tax. Overall khata is the document which licence the property and ensure that your property is eligible for paying the property tax. There are two types of Khata in Bangalore one is A Khata and the second is B Khata. These two are different in nature having their own significance.  

What is A Khata?

A Khata is a register which contains the details of the property like, its name and their other tax details too. A Khata is basically the Khata which was being talked about above.

If a property is in khata A that means that for that property the property taxes are being paid. And they are having no outstanding tax amount on them.

There are two elements of A Khata those are:-

The Khata Certificate

The Khata Certificate is fundamentally a document that a property proprietor/owner requires to enlist his/her property or for the exchange of the ownership that basically happens when a property is sold or even if an owner wants to transfer his/her property to any other. With a specific end goal to make a demand for the khata authentication the proprietor of the property needs to compose a letter to the BBMP (Bruhat Bangalore Mahanagara Palike ) and furthermore join their most recent paid assessment receipt to it. These reports should be submitted with the board alongside a standard cost of Rs. 25 for every property they present the letter for. It is this permit or declaration issues by Khata that will empower the property proprietors to apply for water and power associations or so far as that is concerned getting their hands on a business permit.

The Khata Extract

The Khata extract is the document which contains all the documents regarding the property details. Those details are name of the owner, area of the property, tax details, plot number and mainly such details.

What is B Khata?

B Khata is totally different from the A Khata. B Khata contains the Name of properties which have outstanding taxes on them. And the taxes are yet to be given. Those properties which are in B Khata have yet not received their Khata certificate or any legal status.

How to apply for a Khata?

If you have not applied for Khata of your Property don’t delay this as from the above details now it would be clear to you that how important is khata.

For applying for a Khata all you need is to take an application form from the BBMP, fill that complete from and submit it to the revenue officer of the concerned area along with the tax details paper of the property.

Why is Khata important?

It is very important to have Khata of a property because you will need a Khata for taking electricity connection, water connection and even for any kind of loan.