Applying for a home loan is easy once you have the documents ready. As home loans involve disbursal of large amounts, the bank has strict guidelines when it comes to verification of documents.
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If you are about to purchase your dream house, then here’s a checklist to help you prepare for the home loan documentation process:
See Also: What Is My Home Loan Eligibility?
There are some mandatory documents that must be submitted while applying for a home loan:
Along with the above-listed documents, the applicant must also submit property related documents to get home loans sanctioned. Listed below are some of the common property documents required for verification purposes by banks and financial institutions before disbursing a home loan:
Sale Deed: A sale deed is a legal document which shows the transfer of rights from the owner to the purchaser of the land. The sale deed shows the transfer of property from the builder/owner to your name.
Joint Development Agreement: While buying land or an apartment, you need the joint development agreement (JDA). The JDA refers to an agreement between the landowner and the builder, where the landowner provides vacant land for construction in return for money or ownership.
Sanctioned Building Plan: Make sure to check if the building is authorized for construction. Make sure the building plan is sanctioned by the municipality or housing development authorities.
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NOC From Government Authorities: A No Objection Certificate is issued by government authorities’ stating they have no objection to the construction of the property. The NOC is a must have document while purchasing a property.
Allotment Letter From the Owner: In order to get your loan sanctioned from the bank, you need an allotment letter from the owner, builder or the society which has complete details on the property being bought and the amount of money paid.
Construction Agreement: This is a legal document and an agreement between two parties for the builder to start the work related to the construction of the apartment/house.
Occupancy Certificate: Once the construction of the property is complete, the builder must apply for the OC from the authorities. The OC shows that the building is constructed using proper materials and as per safety standards and is ready to be occupied.
Possession Letter: The possession letter serves as proof that the builder has transferred the purchased property in the name of the buyer on the date mentioned in the letter.
See Also: Why Should You Avail A Home Loan?
Payments Receipt: While sanctioning the home loan, you must submit all payment related documents made to the builder or owner. The bank verifies original proof of payment before disbursing the home loan.
Layout Approval Plan Sanction: This is an approval from the local development authority which assures buyers that the construction is legal and the land/building can be used for residential purposes.
Property Tax Receipts: Make sure the property you are purchasing has all the property tax paid. The property tax must be paid by the owner of the property.
Khata Certificate: The khata certificate has details of the property owner and is mandatory for transfer and registration of a new property. The Khata extracts contain details of the property like size, name of the owner, use of the property and so on. Both the khata certificate and khata extract is mandatory while applying for a home loan.
See Also: Important Facts On Home Loans
Previous or Current Loans On the Property: Before finalizing a property, make sure due diligence is done. Hire a lawyer who will help get details on the property. You will know if the property is mortgaged or involves any kind of dispute or court case. Sometimes, this work is carried out by lawyers hired by the banks. You can also collect information on the loans taken against the property. If the loan is already paid in full, check the closure letter from the concerned bank.
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