Checklist of Documents Required for Home Loan

Home Loans can be an easy and convenient way to fund the purchase of a home. These long-term loans can allow aspiring homebuyers to own the home of their dreams without exhausting their savings.   

Home Loans are repaid in the form of EMIs. Since Home Loans can be sizeable expenses, lenders give borrowers the flexibility to repay the loan over a period of a few decades. For instance, Bajaj Housing Finance offers a Home Loan tenor stretching up to 40 years. This can help in the ease of payment. Home Loan EMIs constitute of 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 of loan repayment.   

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 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 if you are taking a Home Loan with Bajaj Housing Finance. 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, any one document can work.

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 can help you with the Home Loan application process and approval.

Now that we know the list of documents for Home Loans, let us look at some of the things that borrowers should 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 the overall cost of borrowing the Home Loan. Thus, shop around for interest rates. You can negotiate with different lenders for a better offer and 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 after checking your eligibility. If you do not meet your preferred lender's eligibility requirements, do not make an application as not meeting the eligibility criteria can lead to a 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 enquires about the applicant's credit score. Whenever a lender 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 manageable, 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 750+. Anything under 750 may not get the borrower 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 required documents ready at the time of applying for a Home Loan.