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Home loans can be very beneficial for property buyers, as they not only help you buy your dream home, but also help you save on taxes. But you must remember to choose the right home loan if you do not want to face the hassles in the process. Here are a few quick tips that you could keep in mind while applying for a home loan. These tips could help ease the complicated procedure a little bit and at the same time help you save some money.
Getting a home loan is an extremely simple process provided you are eligible for the required loan amount and have some basic documents required for the verification of your identity and your income proofs.
To start the process first find your home loan eligibility and then the city, area and location you would like to buy a home in.
Once finalized with the home property, approach a home loan providing bank to check whether they provide home loan in the area selected by you or is it been black listed by the banks. Note: Black listed areas generally are high defaulter or illegal construction areas where home loans are not given. DO NOT EVEN TRY TO GET A HOME THERE!
Once you are finalized on the home you want to purchase in a proper area and if it is a new construction check for the builders reputation in the market as well as approach the Municipal Corporation along with the building details by which you can know whether the construction is legal or is un-authorized under the Right to Information' Act.
In case of a resale property do the same as mentioned above as well as get the chain of agreements checked from a lawyer and approach the society secretory or chairman informing him about the deal as well as confirming whether there are any dues or loans to be cleared by the current flat owner and there is not dispute on the ownership of the property.
Documents Required for Home Loans
Documents required for self-employed persons:
- Updated pass book or Xerox copy of the applicants statement of accounts for the past 6 months
- A Xerox copy of the applicants ration card
- A profile of the applicants business mentioning at least the nature of the business, client list, suppliers, employee strength, geographical spread, etc.
- In the case of a business partnership a copy of the partnership deed, 3 years P & L a/c, B/S, computation of income certified by a CA and individual computation of income and tax returns for last 3 years is required
- In the case of a proprietor or professional 3 years P & L a/c, B/S, computation of income certified by a CA and an income tax return file statement for 3 years is required
- If the company applying for a loan is a Pvt. Ltd. a remuneration certificate, the board resolution for fixing remuneration, the company's annual report and individual IT returns for last 3 years is required
Documents required for employed persons:
- Latest salary certificate or the original slip
- A Xerox copy of Form no.16 A (TDS Form) from the applicants Employer
- The original certificate from the applicant’s employer for any other allowances that are not reflected in the applicants salary slip
- A Xerox copy of the applicant’s updated bank pass book or a statement of the applicants accounts for last 6 months
- A Xerox copy of the applicant’s voter I.D. card or the applicants Company's I.D. or the applicant’s passport/ ration card
- A passport size photograph of the applicant & co-applicant
To get a home loan try to make document or you might face serious problems in future.
Avoid 3rd party loan agent and prefer direct bank home loan agents only.
Prefer nationalised banks like SBI, Bank of India or better loan rates and clean process, or you can prefer a home loan specialized bank like HDFC Home Loan Finance Ltd for a clean and quick process.
Pre-approved home loan gives an advantage while negotiating a home buying deal.
Your home loan EMI should not be more than 40% of your take away(net) salary.
Go for a longer home loan tenure(20 years+) as low EMI, rupee devaluation and property price appreciation over a period of time more beneficial.
Try making home loan pre-payments as a part of your yearly investments as it reduces the home loan principal amount. Reducing loan EMI amount or loan period is optional and take what helps you the best.