Taking a home loan in India can be complex and stressful if you do not know what documents to submit. After all, there are different types of loans, each with specific requirements. Salaried people face this particular challenge when trying to obtain a home loan.
Lending institutions process loan applications for home loans documents for salaried individuals in India based on the documents presented to them by the applicant, who will be repaying the loan from their salary.
In this article, we will discuss Salaried Persons’ Home loan Documents Requirements in India:
PAN Card
The Income Tax Department allots PAN (Permanent Account Number) to individuals and entities engaged in various business activities. The PAN has to be quoted on any financial transaction, whether opening a bank account, buying or selling stock, or applying for a home loan. PAN serves as an identification document and ensures that everyone pays taxes. While applying for a home loan, you will need to provide your PAN card details at least 30 days before making an application.
Aadhaar Card
If you are planning to buy your first home, you must produce your Aadhaar card. An Aadhar is a 12-digit unique identification number issued by UIDAI (Unique Identification Authority of India). It acts as proof of identity and addresses anywhere in India.
Income Proof- Latest Salary Slips
This document is self-explanatory. You will need to show your latest salary slips of the past 3 months and an official letter stating your employment details. You may also have to provide an IT return to prove that you earn as much as you claim. The pay slip or IT return should also specify whether it is taxable or not. If applicable, include Form 16 as well.
Form 16
To get a home loan, an applicant has to furnish Form 16. This form is issued by your employer and indicates your salary income and any reimbursements. While applying for a home loan, make sure that you have an original Form 16 containing both Part A and Part B (the two parts have different information). Along with these, you should also provide photocopies of these documents. You need one original and a photocopy of either part A or B. If you do not have a copy of Part A or B, it is better to submit another supporting document instead. If there are discrepancies between what is on your bank statement and what is on Form 16, explain them before providing copies of these documents.
Passport Photos
You need to have three passport-sized photos taken against a white background. If you do not have access to such an area, it is best to visit any photo studio and let them do it.
Address Proof
As address proof, you need to submit any one document; One copy of the Voter’s ID card, passport, ration card, latest electricity bill, or driving license. The address on your voter’s ID must match your current residential address. No new document is required if you are using your voter ID card.
Highest Qualification Proof
The applicant has to submit proof of the highest educational qualification claimed.
Latest Payslips
The income proof is a critical component of a home loan application. With lending institutions putting a strong emphasis on verifying your income, having at least three months’ worth of payslips ready will help your application.
Existing Obligation Details
When applicants apply for a home loan, they have to provide details about their existing financial commitments. In the case of multiple loans, it is essential to include a detailed explanation of repayment plans and accounts used to settle dues. The list should contain credit card payments, housing loans (if any), car or auto loans (if any), personal loans, etc. These account statements should also be updated with the latest payment history.
Bank Statements
The documents required will vary from one lending institution to another, but you need to show six months’ worth of bank statements, where you have made deposits and withdrawals regularly. So if you have an account that is not used very often or there are few deposits or withdrawals, some lending institutions may ask for two years’ worth of statements. It ensures that they can verify your source of income.
Income Tax Returns
It is necessary to submit IT returns with the application. You can prove your source of income by submitting tax returns for the last three years. If you are self-employed, you must submit copies of relevant forms—TDS certificates and income tax returns.
Property Documents
You must provide documents that prove you have bought (or will buy) your house. It is best to provide paperwork on any additional property, such as land holdings or rental properties. Depending upon the kind of property you are interested in, you may need to provide documents such as MODT, Sale Agreement, Property Chain, Encumbrance Certificate, Registration and Stamp Duty Receipt, and Allotment letter from the Builder, NOC from the Builder, Property Map, etc.
Important Note: If you are not working now but have received placement from a Tier I or Tier II institute, you can still apply for a home loan by providing your offer letter and joining letter. Individuals who are currently switching jobs can also apply for a loan by providing their resignation letter, offer letter of the new company, and joining information from their current employer.
The Bottom Line
The document list depends on several factors, such as the amount of loan applied for, type of applicant, etc. You can also use the Grihashakti Home Loan eligibility calculator to check your eligibility to apply for a home loan.
