There is always a myth around the Home Loan application regarding the required documents. Anyone who is applying for the first time is usually under an assumption there would be a long list of documents that would be required to get the loan sanctioned and disbursed.
The list looks long, however, if understood it is a very easy task for a salaried customer to arrange. In this article, we would understand the break up of all documents required for any salaried applicant to apply for the Home Loan.
The Documents can be divided into 3 Categories
KYC (Know Your Customer)
KYC is a mandatory requirement for all applicants. An applicant may or may not provide any other documents however they are required to submit the KYC proofs to the loan provider.
- PAN Card:- PAN Card is the most important document while applying for a loan. All applicants whether earning or not have to provide a copy of their PAN Card to the lenders. It is primarily required to check the CIBIL of the customer.
- Address Proof:- The applicants of the loan are required to submit the current address proof to the lender. This can be either Copy of the Aadhaar Card, Voter ID Card, Passport, Latest Electricity Bill, Current Passbook, Latest Bank Statement, registered rent agreement.
- Photo:- All the applicants need to submit their Passport size Photo.
Apart from the ID & Address proof, to understand the profile of the applicants better, the lenders can ask for:-
- Highest Qualification Proof:- Qualification proof is mandatory if the applicant is a professional.
- Relationship Proof:- The applicants are required to submit relationship proof if the co-borrower is a spouse. This can be their Marriage certificate or Passport, or any bank statement reflecting the relationship between the account holders.
It is not mandatory that all the applicants in the loan should be income earners. For all the salaried income applicants in the loan, the following documents are required:-
- Latest Payslips:- All the borrowers should provide three months’ payslips for the loan evaluation. In the absence of payslips, the salary certificate from the employer can also be availed.
- Bank Statement:- Salary account’s latest six months statement is a mandate. Home loans are processed on the entire profile of the customer hence providing a statement of account for all other accounts held by the customer help in strengthening the profile.
- Form 16:- Copy of last two financial year’s Form 16 is required for all salaried employees. Form 16 consists of two parts name Part A & Part B. Part A of form 16 is generated and downloaded from the website of traces and it bears the logo traces at the background of Part A as proof it is downloaded from traces. Part B contains information relating to the computation of salary and other income and calculation of income tax liability. If anyone does not have a tax deduction at the source, he can provide Form 16 Part B to meet the document requirement. There can be cases where the applicant has worked with two or more employers in one financial year. In such cases, the customer is required to provide Form 16 from all the employers of the particular financial year.
- Income Tax Return:- To declare all other sources of income apart from Salary income, the applicants are required to provide the income tax returns filed in the last two financial years.
- Joining Letter/Appraisal Letter:- To study the latest components of salary, the lender asks for the Latest Appraisal letter. In case the applicant has changed service in less than one year span, he can provide a copy of the joining letter bearing his current CTC details.
- Exiting Obligation’s details:- To evaluate the eligibility of the customer’s the lenders require the details of the borrower’s existing obligation. The latest six months statement of account is required. In case any loan is closed in the last six months, the applicant is expected to provide the NOC for the closed account.
- Investment Proofs:- Providing proofs of investment such as Mutual fund statement, PPF account details, FD / RD details adds to the profile of the customer.
Apart from the above documents, there are many special cases where additional documents are required, which are never a part of the generic checklist provided by the representatives.
- Contractual employees can also apply for the loan. Since the contracts expire in a few months, hence such borrowers are required to provide the revised extensions of the last three years.
- Freshers recently joined an organization or borrowers who have recently graduated and availed of campus placement can also apply for the loan. In such cases, a copy of the qualification proof is mandatory. Such instances are approved only if the applicant is professionally qualified from Tier I or Tier II institutes of the field.
- Anyone who is in-between switching jobs or has joined a new organization where his one-month salary is yet to be credited can also apply for a home loan. They need to arrange their resignation & relieving letter from the previous employer along with the current employer’s joining confirmation. The loan would not be disbursed by the financial institutions till the time applicant provides proof of salary credit along with a one-month salary certificate/payslip.
There are several kinds of property documents required for a home loan, Such as sale agreement, Encumbrance Certificate, Property Map, Allotment Letter from the Builder, NOC from Builder, MODT, Property Chain, Registration & Stamp Duty Receipt, etc. The required documents depend upon the kind of property purchased by the customer.