We all want to buy the best house possible. However, with property prices skyrocketing, making the dream a reality may be a step too far. Here, a good old home loan comes to the rescue.
A home loan, as the name implies, is a sum of money borrowed from a bank or financial institution to buy residential or commercial property. The individual must then repay the lender in Easy Monthly Installments (EMI) at a fixed home loan interest rate.
Taking out a home loan is a big step. A home loan can often appear overwhelming to those considering it for the first time, from the sheer amount of financial planning required to the lengthy process of getting approved for one. But it doesn't have to be that way! Let's go over the basics of a home loan in India.
Depending on your needs, you can choose from a variety of home loans.
Some popular options include:-
Home Purchase Loan - This allows you to purchase your dream home within your budget. (Check out the best Luxury Township In Nagpur)
Construction Home Loan - This is the loan for you if you want to build your own house!
Land Purchase Loan - As the name implies, this loan allows you to purchase land.
Home Improvement Loan - This category includes any renovations or reconstructions.
Home Repair Loan - This is primarily for much-needed house maintenance.
Home Extension Loan - If you want to make your house more noticeable and spacious, this is a good option!
Documents required for a home loan include:-
The required documents to apply for a home loan are nearly identical across all banks and Housing Finance Companies. However, the home loan documents required may differ between banks depending on your home loan type, property type, individual credit profile, and so on. Here is a list of important home loan documents that you must submit at the time of loan proposal.
Housing loan documents are required to obtain a home loan. These contain essential details about the applicant, such as age, address, income, jobs, income tax, and so on. Keep in mind that income documentation for home loans differs slightly between salaried and self-employed applicants.
Documents Required for a Home Loan for Salaried Persons:-
Address proof- Aadhar card, Passport, Driving Licence, Phone Bills, Ration Card, Voting Card, or Any other Certificate from Statutory Authority
Age Proof - PAN Card, Passport, or Any other Certificate from Statutory Authority
Income Proof - Includes salary slips for the last three months, Form 16 for the last 2 years, and the latest six-month bank statement
Documents required for a self-employed home loan:-
Address proof- Aadhar card, Passport, Driving Licence, Phone Bills, Ration Card, Voting Card, Some other Certificate from Statutory Authority,
Age Proof - PAN Card, Passport, or Any other Certificate from Statutory Authority
Income Proof - For business and ITR purposes, such as proof of business existence, last three years of income tax returns, accountant-certified balance sheets, and last 12 months' bank account statement.
What is the Home Loan process?
The home loan application process in India varies depending on the lender. The following is a step-by-step guide to getting a housing loan in India:-
Fill out the Housing Loan Application Form and include all required documentation.
Make payment for the processing fee.
Discuss your requirements with the bank.
Documents must be submitted (KYC, income & bank statements)
Sanction/approval process
Processing of the offer letter
Property required documentation processing, followed by a mandatory legal check
Processing any technical checks and estimating the site
Finalizing the loan agreement
Signing the contract
The loan disbursal
You can also look up home loan interest rates before you go. You can get a better idea of your home loan plans and how you want to customize them by using our services such as the home loan eligibility calculator and home loan EMI calculator.
Conclusion:-
Because buying a home is a significant financial and emotional decision, you should consider all of the above factors and choose a loan type and amount that will not burden you later. Furthermore, it is best to conduct extensive research online before selecting a bank. A quick Google search may yield better deals on interest rates and other fees. However, make sure to speak with your main bank manager as well, as they will be able to provide you with the best deals and services.
Also Read,
1. Renting vs Buying a house: Pros and cons
2. 5 documents that you need to verify before buying a ready-to-move flat in India
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