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Home Loans Required Documentation
After deciding to take a home loan for the purchase of your dream home, the first thing to that needs to be consider is the required documentation for getting home loans. If any of the important documents are not submitted then approval of the home loan can get delayed and there can also be chances of application being rejected.
The procedure for getting a loan starts off with the application form filling, before which you should go through banks website to know about the required documents. Most commonly the documents asked from an applicant are; PAN card, Passport, Voter ID card, Ration card etc. Additionally, banks have different documentation requirements depending upon:
1. Purpose of loan
2. Applicants category
3. Loan amount
4. Term of loan
Documentation for Salaried People
a. Last 3 months salary slips
b. Updated salary certificate
c. 2 years job continuity
d. Appointment letter
e. 2 years Form 16
f. 6 months bank statement
g. For private limited company employees, company profile
Documentation for Self Employed People
a. Business profile on company letterhead
b. Last 3 years IT returns
c. Chartered accountant certified income computation
d. Last 3 years balance sheet & P/L account
e. Last 1 year bank statement for personal & business account
f. For professionals, professional certificate copy
Documentation for Property
a. Khata certificate
b. Last 13 years EC
c. Latest paid receipt for property tax
d. Last 13 years parent documents & rest link documents
e. Already made payment receipts
f. For old house purchase; sellers title documents & sale agreement
g. For flat that is newly constructed; construction or sale agreement & on builders letterhead break up of total cost
The other important point to keep note of are that banks always make sure that repayments to be made by borrower do not exceed 40% of his net salary & lend about 90% of loan amount. If your repayment record has been poor or had defaults for previous loans then it could be very difficult to get approved for a home loan.
Loan Modification Procedures
When you are in a period of extreme financial difficulty, it may be best for you to look into a possible loan modification procedure.
While it is not initially easy to be approved for a loan modification procedure, it may be in your best interests to try to at least obtain some information from your bank. Many banks are more than willing to work with you and your financial needs, especially since they want to ensure that you will continue to make your scheduled monthly payments on your loan.
The first step in the loan modification procedure is approval. In order to be approved for a loan modification, you have to prove that you are currently experiencing a period of extreme financial difficulty. Possible reasons for financial difficulty may include:
Accidental Injury
Unexpected Medical Expenses
Unemployment, Company Lay-Off
Death of family member
General Financial hardship
No matter what the reason is for your financial situation, it is very important that you document your financial problems with paperwork. If necessary, bring copies of your payment receipts, medical receipts, written documentation of your financial situation, bank statements, etc. These documents will aid you greatly in proving to your bank that you are currently unable to make your scheduled monthly payments.
Once the bank has approved your request for a loan modification, there is a period where they may communicate with you on acceptable terms for the modification of your loan. It’s very important that you thoroughly examine any changes that your bank may make to your loan, as it is sometimes common for the negotiated payment amount to be higher than the initial amount.
This may be an attempt from the bank for you to pay off your balance sooner, since you are now regarded as “high-risk” because of your financial situation. It’s very important to let your bank know exactly what you can afford each month, as this will ensure that a beneficial decision is reached for both you and your bank.
In some cases, you may have an existing loan with a company that does not offer loan modification procedures. If this is the case, you may have to either prioritize your other finances around this loan payment, or let the company know that you are no longer able to make the payments. Since most companies prefer to receive their money without the aid of collection agencies, this may help them to negotiate a decision to work with you and your finances.