Checklist of Documents Required for Home Loan

Home Loans have become one of the easiest and most convenient ways to fund the purchase of a home. These big-ticket, long-term loans allow aspiring homebuyers to afford the home of their dreams without exhausting their savings.   

Home Loans are repaid in the form of EMIs. Since Home Loans are big-ticket expenses, lenders give borrowers the flexibility to repay the loan over a period stretching up to 40 years. This ensures affordability and ease of payment. Home Loan EMIs constitute a principal component and an interest component. During the initial years of loan repayment, the interest component is on the higher side. However, as time advances, the interest component goes down and the principal component goes up. Lenders charge higher interest during the initial years to cover up for the risk involved in lending money.   

If you are applying for a Housing Loan and want to experience a stress-free and hassle-free Home Loan application process, make sure you have all the documents required for the Home Loan ready with you. This article will give you the list of documents required for a Housing Loan. Read on to know more.

List of Documents Required for Home Loans

Home Loans involve a substantial amount of money and therefore, lenders sanction these loans after proper due diligence. This means being prepared to provide a lot of paperwork. In general, to be able to secure a loan, you will have to provide documents that establish your identity as well as provide proof of the income details mentioned by you in your Home Loan application form. You will also have to provide all property-related papers. Your lender will need these documents to do a background check and ensure the property is not disputed in any way and has a free title.    

​In general, before you begin the Home Loan application form, keep these from the Home Loan documents list ready with you.  

1. Property Documents

These would include: 

• Sales Deed, Allotment Letter or Stamped Agreement of Sale
• Possession Certificate
• Occupancy Certificate
• A No Objection Certificate obtained from the housing society or builder

• Land tax receipt obtained from the concerned department

• Bank account statements that show the payment that you had made to the builder or seller
• A document that elaborately details the approximate construction cost of the house

2. Identity Proof Documents

Please note that submitting one’s PAN Card or Form 60 is mandatory. Other documents would include: 

• Aadhar Card
• Passport
• Voter ID
• Driving License

Please note that you won't be required to provide all five of these documents, one document is enough to support your identity.   

3. Address Proof Documents

As proof of your address, you can provide one of the following documents: 

• Property tax receipt
• Water tax receipt 
• Electricity bill
• Phone bill
• Any legal document that has your permanent address on it

4. Income-Related Documents

Under this category, you may be required to provide:

• A copy of your bank account statement or passbook
• Salary certificate provided by the employer in case of salaried individuals
• Profit and Loss statement in the case of self-employed individuals
• Liabilities statement and personal assets
• Form 16 or IT Returns of the last two or three years in the case of salaried individuals
• IT returns or assessment orders copies of the last three years

​Please note that this is not an exhaustive list and that your lender may ask for more documents at the time of loan approval. However, having the above-mentioned Home Loan required documents ready with you will allow you to fill out the Home Loan application form and get approved for a loan quickly.  

Now that we know what the required document for Home Loans are, let us look at some of the things that borrowers must keep in mind while availing of a Home Loan.  

Applying for a Home: Things to Consider 

1. The interest rate you are offered on your Home Loan will decide how easy or difficult it will be for you to repay the loan. Thus, do not accept the first offer you get from the first lender you approach. Instead, shop around for interest rates. Many lenders exist in the market -- negotiate hard with the good ones and in the end, opt for a Home Loan deal that works best in your favour.  
2. Once you have decided on the lender you wish to go with, before beginning the Home Loan application process, go to your preferred lender's website and check their eligibility requirements. Apply for a Home Loan only if you qualify. If you do not meet your preferred lender's eligibility requirements, do not make an application as not meeting the eligibility criteria leads to Home Loan application rejection. 
3. If you have been rejected recently, do not make a Home Loan application immediately. Whenever a borrower applies for a Home Loan, the lender approaches one of the credit agencies and enquiries about the applicant's credit score. Whenever a financial institution enquires about an applicant's credit score, it is referred to as a hard enquiry. Too many hard enquiries bring down an individual's credit score. So, if you have been rejected recently, wait a while before making another application.  
4. If you want to make your Home Loan affordable, try and get yourself the lowest interest rate possible. The easiest way to do this is to maintain a good credit score. Lenders expect Home Loan borrowers to have a credit score of at least 750. Anything under 750 will not get your favourable loan terms and conditions.  

Also Read: Home Loan vs Construction Loans 

A Home Loan is a big commitment that an individual makes. Therefore, commit only after proper planning. To experience a smooth application process, keep all the above-mentioned documents ready and to experience a stress-free loan journey, keep the above pointers in mind.  

*Terms and conditions apply.