Buying your own home has been your long-term goal. You have enough savings for the initial payment and a steady income to afford the monthly fees. However, before you qualify for housing finance, you have to gather some key documents that show your identity, income, and property information. This article will assist you with the necessary documents.
Proof of Identity and Age
This document is required to verify that you are who you claim to be and meet the minimum age criteria for housing finance. The proof of identity and age can be any of the following documents:
- PAN card: This is the most common and preferred document for identity proof. It also serves as proof of income tax returns, another important home loan document.
- Aadhaar card: This is the unique identification number issued by the government of India. It contains your biometric and demographic information and can be used as proof of identity and address.
- Passport: This official document issued by the Ministry of External Affairs certifies your citizenship and identity. It also contains your date of birth, which can be used as proof of age.
- Voter ID card: This document issued by the Election Commission of India allows you to vote in the elections. It also contains your name, address, and date of birth, which can be used as proof of identity and age.
- Driving license: This document issued by the Regional Transport Office permits you to drive a vehicle. It also contains your name, address, and date of birth, which can be used as proof of identity and age.
Income Proof for Salaried and Self-Employed Applicants
This document is required to verify that you have a steady and ample income to repay the home loan. The proof of income depends on whether you are a salaried or a self-employed applicant.
Salaried applicants: If you are a salaried candidate, you need to provide the following documents as proof of income:
- Form 16: This document shows the income and TDS details. It is issued by your employer every year and can be used as proof of income for the last two financial years.
- Salary slips: These documents show the details of your monthly salary, such as basic pay, allowances, deductions, etc. You need to provide the salary slips for the last three months as proof of income.
- Bank statements: These documents show the transactions in your bank account. You must provide the bank statements for the last six months as proof of income. They should reflect your salary credits and other income sources, if any.
Self-employed applicants: If you are a business owner, you need to provide the following documents as proof of income:
- Income tax returns (ITR): These documents show the details of your income and tax paid to the government. You must provide the ITR for the last three financial years as proof of income. They should be filed and verified by the income tax department.
- Profit and loss statement: These documents show the details of your business income and expenses, assets and liabilities, etc. You must provide the profit-and-loss report and balance sheet for the last three financial years as proof of income. They should be audited and certified by a chartered accountant.
Once you have these papers, use the home loan prepayment calculator and EMI calculator to decide on your budget and repayment plan.
Business Proof
This document shows the details of your business, such as registration, ownership, nature, etc. You need to provide the business proof as proof of income. It can be any of the following documents:
- GST registration certificate: This document shows that your business is registered under the GST regime. It contains your GST identification number (GSTIN) and other business details.
- Trade license: This document shows that your business is authorized by the local municipal authority to operate in a specific area. It contains your name, address, and nature of business.
- Partnership deed: This document shows the terms and conditions of your partnership arrangement with your business partners. It contains the partners’ names, addresses, and profit-sharing ratios.
- Memorandum and articles of association: These documents show your company’s constitution and objectives. They contain the directors’ and shareholders’ names, addresses, and shareholding patterns.
Property Documents
This document verifies that you are the owner or the prospective buyer of the property for which you are applying for the home loan. The proof of property details can be any of the following documents:
- Sale agreement: This shows the terms and conditions of the property sale between you and the seller. It contains the names, addresses, and signatures of both parties, the description and location of the property, the sale price and mode of payment, etc. It should be registered and stamped by the sub-registrar of the area where the property is located.
- Sale deed: This shows the ownership transfer from the seller to you. It contains the same details as the sale agreement, but it is executed after the payment of the full sale price and the registration of the property. It should be registered and stamped by the sub-registrar of the area where the property is located.
- No objection certificate (NOC): This document shows that the seller has no objection to selling the property to you and that there are no pending dues or disputes on the property. It can be obtained from the builder, the society, the bank, or any other authority with a stake in the property.
- Khata certificate: This document shows that the property is registered in your name in the municipal records. It contains the property details, such as the size, location, tax assessment, etc. It can be collected from the municipal corporation or the gram panchayat of the area where the property is located.
- Encumbrance certificate: This document shows that the property is free from any lawful or financial liabilities, such as mortgages, loans, litigation, etc. It can be obtained from the sub-registrar of the area where the property is located.
Conclusion
These are some key documents necessary for housing finance approval. However, depending on your profile, your lender may ask you to furnish some additional papers.
