Getting a home loan can seem intimidating if you’ve never done it before, especially if you’re not sure what documents you’ll need to provide and when your lender will request them.
This article will look at the key points from the beginning to the end so that you can feel prepared and ready to take this big step in the future.
Things To Consider During Home Loan Process
Build Your Credit Score
Before applying for a home loan, your lender will want to know that you possess a good bank balance and credit history.
Building your credit score is mandatory and usually requires two things:
- First, make sure you have an open and active account; make sure that there are enough funds in your account to cover what could be considered emergency expenses if you were unemployed
- Second, create a strong payment history by making regular payments on time (including utilities and rent) every month
Select a Lender
You’ll need first to select a lender and work with that company through all phases of your home purchase. You can find lenders using online resources or ask your friends and family members for recommendations.
Regardless of how you get connected with a lender, you should interview at least two or three different lenders before choosing one.
Remember that it’s not limited to getting a reasonable rate—the lender you choose will help guide you in every phase of the home loan process.
Get Pre-Approved
Before looking for a home, it is critical to get pre-approved by a lender.
Your housing loan lender will run your credit and verify your income—including employment history, cash flow and assets. Some lenders also require proof of other assets such as retirement accounts or life insurance policies.
Calculate How Much You Can Afford
Before even looking at homes or talking to lenders, you need to figure out your capacity to spend on a home.
Start by visiting the online home loan calculator website and figure out your monthly payment on different loan amounts with varying home loan rates in India.
Shop For Rates
Most home loan brokers offer a variety of rates from different lenders, so it’s essential to shop around for your best deal.
Before looking for home loan rates in India, have your credit checked and prepare to gather documentation on your income, assets and employment history.
Finally, if there is a co-borrower, be sure they are prepared with documentation like proof of income and credit report information.
Documents Required During Home Loan Process
The bank you are applying for a home loan from will be in touch with you about when you have to visit them and will want certain documents. These documents will be kept on record at your local branch office as per RBI guidelines.
The individual must submit the following documents to initiate the home loan process successfully and get approved for a home loan quickly:
Must-Have Documents
- Application form for a home loan
- Last six months’ account statement
- Residential and ID proof
- Two passport size pictures
- Verification letter signed by the banker
- Property documentation
KYC Documents
- Photo Id Proof (any one): Driving License, Pan Card, Voter Id, Passport
- Residential Proof (any one): Ration card, landline bill, recent electricity bill, bank passbook
- Age Proof (any one): Birth certificate, 10th mark sheet, passport, pan card
Financial Documents
- Salaried: Last two years IT returns and original salary certificate from the current employer
- Self-Employed: Last three years IT returns and proof of business
- Self-Employed Businessmen: Last three years Assessment order / IT return copies and advance income tax payment challans
Property Documents
- Sale agreement or deed of sale
- Land tax payment receipt
- Possession certificate
- NOC from the builder or housing society
- Allotment Letter from the builder/ housing board
Summing Up
At first glance, getting a home loan can seem like a complicated process. It’s more than just filling out an application, waiting for approval, and signing some papers. There are many steps involved in securing financing for your new home—and these include several documents that you’ll need to gather and submit to your lender to enjoy the hassle-free home loan process.
Before you start searching for homes, pull together all of your financial documents so that it’s easy to determine the value of a house you can afford.
