home loan documents

It is always recommended to create a checklist for all the important documents required for home loan as required by the banks and NBFCs (Non-Banking Finance Companies).With the recent initiatives by various banks in lowering the Home loan rates, owning a home is no more a dream for many of us. But the procedure for the application of loan is still the same and so are the documents required for it.

Checklist of Documents required for Home Loan
Address Proof: The documents like Registered Rent Agreement, Passport, Electricity Bill up to 3 months old and License forms the address proof of an applicant.
Identity Proof: Documents like Driving License, PAN, Voter ID and Passport serves as the identity proof of the applicant.
Financial Documents: 2-year Form 16, 3-month salary slip and 6 months bank statement are some of the financial documents of the applicant required for the process of loan application.
Employment Appointment Letter: In case the applicant is employed in his/her current employment for less than 1 year, Employment Appointment letter is also required

Following documents for home loan are required along with the loan application form:
1. Photo Identity Proof: Passport/ Driving License/ Voter ID/ PAN
2. Residence Address Proof: License/ Registered Rent Agreement/ Utility Bill
3. Residence Ownership Proof: Sale deed or rental agreement
4. Income Proof: salary slip, bank statement and Form 16
5. Job Continuity Proof: Appointment letter at employment and validation letter from HR
6. Bank Statement: Past 6 months’ document
7. Property Documents: Sale deed, Katha, transfer of ownership
8. Advance Processing Cheque: A cancelled cheque for validation of bank account
9. Investment Proof: LIC, mutual funds, property document etc.
10.ITR (Income Tax Return):
•    For Salaried Individuals, Form 16, 3-month salary slip and bank statement of the  applicant are required.
•    For Self Employed Professionals (SEP), IT returns for last 2 years along with computation of past 2-year income tax to be certified by a Chartered Accountant.
•    For Self Employed Non-professionals (SENP), the same IT return is required for duration of 3 years.
11.  Passport Size Photographs of the Applicant.

For Senior Citizens
In addition to the above mentioned documents, the documents for home loan for senior citizens require following as well.
1. PAN Card or Passport: As an age proof for Senior Citizens.
2. Income Proof: Pension Returns or Bank statements.

Mortgage loan is a type of loan where borrower is required to mortgage one or more of his/her assets to obtain a specified amount of loan. Now the question arises, when an asset is attached against the loan, then why income proof is required to attach to obtain such kind of loans? As the guidelines of the mortgage loan states that in case of default in the repayment by the borrower, the asset attached to it can be put on sale to release the money. But, sometimes complicated assets like land is difficult to sell off, thus lenders inquire for the borrower’s income proof to be sure of EMIs. Another is the devaluation of land as an asset lead to putting lender at risk.

About Patta – Meaning and How to obtain?
A legal document issued by government as a proof of ownership of a piece of land is known as Patta. Issued in the name of the owner, it is meant only for the properties which are in constant use i.e. an unproductive land cannot procure Patta from government. In case of multiple-ownership of land with division of property, Pataa is issues to all the land owners but in absence of division, no Patta is issued. Patta is only issued when a building or house is built upon a land.

Patta works like a Will Draft which automatically transfers the property to next family member in absence of ‘Will’. Being a legal document, it is of immense importance for all kinds of property dealings under the law. It is issued  by the Tehsildar or administrative authority of the district. An application is required to be submitted along with necessary documents and details of the owner. After considerable verification and inspection of the land as well as owner, Patta shall be issued. Patta is not required to get renewed periodically, it get renewed only at the time of name transfer of the property.

After submitting all the mentioned documents, the Bank validates their authenticity and further processes the loan.