Many prospective borrowers fear that they might not be able to get their loan disbursed to them on time due to the processing time involved, verification of documents etc. Although they are quite a time consuming process, you as a borrower can help in reducing the delay by keeping the required documents ready before you apply for a home loan.
If you can just bear a few things in mind regarding the general conditions and requirements pertaining to the documents required and you level of eligibility etc, you might have completed almost half the process for your getting your loan approved. However, it is important for you to know that the documents that are required may vary from one bank to another. Also the tenor of the loan, the repayment policy etc also differs from one bank to another.
Who can apply a home loan?
Salaried and self employed individuals (sole proprietors, partnerships, limited companies) are eligible to apply for a home loan.
What are the factors on which the loan amount depends?
1. Applicant:
It first depends whether the applicant is an individual or firm, if he is salaried or self employed.
2. Value of the property:
Depending on the value of the property, banks usually provide 60-85% of the agreement amount. For example if you are purchasing a flat for Rs 40 lakh, you will get a loan of up to Rs15.30 lakh i.e., 85% IF your agreement value is only Rs 25 Lakh.
3. Age:
The minimum age of the applicant is required to be between 22-25 years and the maximum age limit can vary from 58-65 years. Generally the maximum age can also be the age by which the tenor of the loan is completed. For example, if you as an applicant are of the age of 45 years, then the maximum tenor of the home loan will only be for 15 years.
4. Income:
This factor determines the repayment capacity of the applicant. If you as an applicant are not able to conform to the minimum EMI payments, in such cases a co-applicant may be required where the joint repayment capacity will be considered.
5. Purpose of the loan:
The reason for which you may require the loan may be for buying a plot, under construction property, ready to move in property, renovation purposes, or even for building your dream home. So once you identify the category you want fit yourself in, approach the bank with your loan application and specify the reason as to why you require a loan.
What are the documents that are required to be submitted?
Application form, along with the details of the processing fees (which are either fixed or a percentage of the loan) and the photographs of the applicant are required to be submitted.
Income proof:
If you are a salaried employee, along with your address proofs, Employment form issued by employer Copies of pay slips of the last few months Latest Form 16 issued by employer Bank statements Identity
If you are self employed, details pertaining to the nature of your business, year of establishment, present bankers, form of organization, Statement of total income, income tax assessment orders, and returns for the last few years Balance sheet and profit and loss account for the last few years Copy of partnership deed if it is a partnership firm, or copy of memorandum of association and articles of association if it is a company, are required to be submitted.
Other documents that may be required
Net worth statement of applicant and co-applicant
Copies of LIC policies
Information regarding your family members in the following order should also be provided:
Name, age name, age, relationship, occupation, income Particulars of guarantor in the prescribed format with proof of income These documents need to be submitted in respect of property to be purchased: Original agreement with the developer Certified copy of approved plan Copies of receipts of payments made to developer Certified copies of all documents pertaining to the property, need to be submitted along with your loan application.