What Are the Documents Required for a Home Loan?

A home loan is a long-term investment and before you apply for it, you must know what documents are required for a home loan.

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Introduction

Buying a home is a big investment, and the process can be both exciting and overwhelming. One of the most important steps in the home-buying process is securing financing, and for many buyers, that means taking out a loan.

Before you can apply for a loan, though, you’ll need to gather some important documents. This can seem like a daunting task, but it’s actually not too difficult once you know what lenders are looking for. In general, you’ll need to provide financial information and documents related to your employment and income, debts and assets.

Here’s a closer look at some of the documents you may need to provide when applying for a home loan:

-Your most recent tax returns: Lenders will want to see your most recent federal tax returns in order to verify your income. If you’re self-employed or have any other complicated financial situation, you may need to provide additional documentation.

-W-2 forms: These forms will show lenders your salary and how much taxes have been withheld from your paychecks. If you’re self-employed, you won’t have W-2 forms, but you’ll need to provide other documentation of your income.

-Pay stubs: Lenders will want to see your most recent pay stubs in order to verify your current income. Pay stubs can also give lenders some insight into your employment history.

-Bank statements: Lenders will want to see bank statements from all of your accounts in order to get an idea of your overall financial picture. Be sure to include statements from any accounts that contain assets you plan to use as collateral for the loan.

-Proof of debts and assets: Lenders will want documentation of any debts you owe as well as any assets you own. This can include things like student loans, credit card balances, car loans, investments, etc.

List of documents required for a home loan

When you apply for a home loan, you will need to submit a few documents to the lender. These documents are required so that the lender can verify your identity, income, and assets. Some of the documents you will need to submit include your driver’s license, pay stubs, tax returns, and bank statements.

Income documents

In order to qualify for a home loan, you will need to provide a lender with evidence of your income and employment history. The following is a list of common documents that may be required:
-Pay stubs from the last 30 days
-W-2 forms from the last 2 years
-Tax returns from the last 2 years
-Bank statements from the last 2 months

Salary slips

Your salary is the first thing a bank looks at when you apply for a home loan. After all, this is the primary source of repayment for the loan amount that you have borrowed. Most banks ask for at least 3 months’ to 1 year’s salary slips to process your home loan application. You can also submit Form 16 issued by your employer in lieu of salary slips.

##2. Bank account statements
Your bank account statements give the lender a clear idea about your monthly income and expenses. The lender will also look at your past repayment history to see if you have been prompt with EMIs, if any. Most banks ask for last 3 to 6 months’ bank account statements when you apply for a home loan.

##3. Income tax returns
Income tax returns (ITR) are another important document that banks ask for when you apply for a home loan. Your ITRs act as proof of your income and help the bank ascertain your repayment capacity. Banks usually ask for last 2 to 3 years’ ITRs when processing a home loan application.

##4. Proof of identity and address
When you apply for a home loan, you will need to submit documents that prove your identity and current address. Some of the common documents accepted as proof of identity are passport, Aadhaar card, PAN card, voter’s ID card, etc. Documents like utility bills, lease agreement, ration card, etc., can be submitted as proof of current address

Bank account statements

Your loan application will require your bank statements from the past three months. The lender will want to see that you have a steady flow of income and they’ll also be looking for red flags such as large deposits or cash withdrawals.

Form 16 or income tax returns

If you are salaried, then your income tax returns for the last 2 years shall suffice. If you are self-employed, then along with your ITRs, bank statements for the last 6 months and profit and loss account and balance sheet certified by a CA shall be required.

Property documents

If you’re planning to apply for a home loan, you’ll need to have a few important documents handy. The exact list will vary from lender to lender, but here are some of the basics:
-Your most recent pay stubs
-W2 forms from the last two years
– bank statements from the last few months
– tax returns from the last two years
– a list of your debts and assets
– proof of any other income (such as child support or alimony)
– a copy of your rental agreement, if you’re currently renting
– documentation of any other assets (such as stocks, bonds, or investment property)

Title deed

The title deed (or property deed) is a document that proves you own the house. The title deed also lists any restrictions on the property, such as easements (rights of way for utilities) or covenants (restrictions on what you can do with the property). Your lender will want to see a copy of thetitle deed to make sure that you actually own the property and that there are no limits on what you can do with it.

Approval plans

2. Approval plans – these are the approved plans for the construction of the home. The bank will need to see these to ensure that the home is being built to code and that it meets all of their requirements.

Property tax receipts

As the name suggests, property tax receipts are proof that you have paid your property taxes. Most lenders will require you to have paid your property taxes for the current year, as well as any outstanding taxes from previous years. If you have not yet paid your property taxes for the current year, you will need to do so before applying for a home loan.

Sale deed

The sale deed is the most important document as it is the legal proof of the transfer of ownership of the property from the seller to the buyer. The sale deed has to be registered with the sub-registrar within four months from the date of execution and has to be compulsorily stamped.

Latest property valuation report

One of the first steps in applying for a home loan is to have your property valued by a professional valuer. This will give the lender an idea of how much the property is worth and help them to determine how much money they are willing to lend you.

KYC documents

The most important documents that you will need while applying for a home loan are your KYC (Know Your Customer) documents. All banks and financial institutions require these documents to verify your identity and assess your creditworthiness. These documents include your PAN Card, Aadhar Card, Passport, Driving License, Voter ID card, etc. You will also need to submit your latest passport-sized photograph.

Passport

1.1 Passport – All applicants must have a valid passport. If any applicant does not have a passport, they must apply for one immediately. Visit the nearest Passport Canada office or authorized travel agent to apply for a passport. The application form (PPTC040) and instructions (PPTC 153) are available online at www.passportcanada.ca or by calling 1-800-567-6868.

PAN card

At the time of applying for a home loan, you will be required to submit certain documents to the lender. These documents are necessary to process your loan application and determine your eligibility for a home loan. Some of the common documents required for a home loan are listed below.

-PAN card: A PAN or Permanent Account Number card is issued by the Income Tax Department and is necessary for any financial transaction in India, including applying for a home loan.

-Address proof: You will need to submit proof of your current address, such as a utility bill, lease agreement, or passport, to the lender.

-Identity proof: In order to verify your identity, you will need to submit a government-issued ID card such as your passport, PAN card, or Aadhar card.

-Income proof: The lender will require proof of your income in order to determine your eligibility for a home loan. This could include pay stubs, bank statements, tax returns, and so on.

-Asset declaration: If you have any assets such as property or investments, you will need to declare them to the lender. This is necessary in order to assess your overall financial worthiness.

Voter’s ID

A voter’s ID is one of the documents required for a home loan. This document is used to verify your identity and helps to ensure that you are who you say you are. The voter’s ID can be in the form of a driver’s license, passport, or other government-issued identification.

Driving license

1. Application form with a passport-sized photograph of the applicant
2. Residence proof such as ration card, electricity bill, telephone bill, etc
3. Identity proof such as passport, voter’s ID card, PAN card, etc
4. Driving license
5. Last 3 months’ salary slips
6. Form 16 or Income Tax Returns for the last 2 financial years
7. Statement of current account for the last 6 months
8. Statement of savings account for the last 12 months
9. Documents relating to current and previous EMIs

Aadhar card

1. Aadhar card
2. Passport size photographs
3. PAN card
4. Home loan application form
5. Processing fee cheque
6. Last 3 months payslips
7. Last 3 months bank statements
8. Form 16 or Income Tax Returns for last 2 financial years

Miscellaneous documents

In addition to the above, you will also need to provide the lender with miscellaneous documents. These may include:

-Your latest income tax return
-A copy of your last 3 months’ payslips
-Your latest bank statements
-A copy of your ID (passport, drivers licence, etc)

Loan application form

The first thing you need when applying for a home loan is the loan application form. You can get this form from the lender or from a mortgage broker. The form will ask you for basic information about yourself and your finances, as well as your employment history.

2. Personal financial statement: This document will list your assets and liabilities, as well as your income and expenses. It’s used to determine how much you can afford to borrow.

3. Tax returns: Lenders will want to see your last two years of tax returns in order to verify your income. If you’re self-employed, they may also want to see your business tax returns.

4. Pay stubs: Lenders will want to see your most recent pay stubs in order to verify your income. If you’re self-employed, they may instead request bank statements or other proof of income.

5. Bank statements: Lenders will want to see your most recent bank statements in order to verify that you have the necessary funds for a down payment and closing costs. 6. Investment account statements: If you have money invested in stocks, bonds, or mutual funds, you’ll need to provide statements from those accounts as well. 7. Retirement account statements: If you have money saved in a 401(k) or other retirement account, you’ll need to provide statements from those accounts as well

Processing fee cheque

The processing fee is a charge levied by the bank for processing your home loan application. This fee is generally a percentage of the loan amount and is non-refundable. A demand draft or cheque for the processing fee, drawn in favor of the bank, has to be submitted along with the completed home loan application form.

Photographs

In addition to the previously mentioned documents, most mortgage companies will require that you submit at least three recent photographs of the home you are hoping to purchase. These pictures should be of the front exterior, back exterior, and one of the main rooms inside the home. By having these photographs, the mortgage company can get a better idea of the property you are hoping to purchase as well as its overall condition.

Conclusion

Now that you know what documents are required for a home loan, you can begin the process of gathering them. It’s important to have all of your ducks in a row before beginning the application process, as this will make it much smoother and increase your chances of being approved for a loan.

If you have any questions about the documents required for a home loan, be sure to ask your lender. They will be able to provide you with more information and help you determine which documents you need to provide.