Home Loan Essential Documents and the Significance of Occupancy Certificate

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Home loans help you make your dream of owning a house a reality. They offer a way to reach this goal without using up your savings or investments or giving up on important financial goals like ensuring a comfortable retirement or your daughter’s marriage. These loans come with various benefits and features. 

Before you start applying for a home loan, knowing all the required documents is crucial. Gathering all the home loan documents beforehand ensures you are at a stronghold. That’s why we have made this list of all the important home loan required documents you’ll need during the application process. Additionally, we’ll also emphasize the importance of obtaining an occupancy certificate.

Understanding Home Loans and Its Types

You can get a home loan from banks, financial institutions, and Non-Banking Financial Companies (NBFCs) to help you buy a home. You offer the home you are buying as collateral for the loan. These loans provide a large sum at reasonable interest rates (typically around 7-10%). You pay back the loan in installments called EMIs, and these loans can last 20-25 years. Once you finish paying, the ownership of the property is transferred back to you.

Getting a home loan has become more popular in India, especially with increased property prices and the growing need for affordable housing. Home loans are a serious financial commitment and require careful consideration.  Here are some of the popular home loans in India: 

  • Simple Home Loan
  • Home Construction Loan 
  • Home Improvement Loans
  • Joint Home Loan
  • Balance Transfer Home Loan

Documents Needed for Seamless Home Loan Process

Gathering all the home loan required documents may seem like a tough job at first, but it is really easy. Remember to ensure all your documents are up-to-date and in the proper file to prevent them from losing. Here are some common documents that you should have during the process:

  • Application Form: Complete the form with your recent passport-sized pictures attached.
  • Proof of Identity: Provide a photocopy of documents like a PAN Card, Passport, Aadhaar Card, Voter’s ID Card, or Driving License.
  • Proof of Age: Include a photocopy of documents like an Aadhaar Card, PAN Card, Passport, Birth Certificate, 10th Class Mark-sheet, Bank Passbook, or Driving License.
  • Proof of Residence: Attach a photocopy of documents such as Bank Passbook, Voter’s ID, Ration Card, Passport, Utility Bills (Telephone Bill, Electricity Bill, Water Bill, Gas Bill), or LIC Policy Receipt.
  • Proof of Income for Salaried: Include a copy of Form 16, your most recent payslips, income tax returns (ITR) for the last 3 years, and proof of investments (if any).
  • Proof of Income for Self-Employed: Provide details of your income tax returns (ITR) for the past 3 years, Balance Sheet and Profit & Loss Account Statement of your Company/Firm, Business License Details, and proof of your business address.
  • Property-related Documents: Attach a No Objection Certificate (NOC) from the Society/Builder, a detailed cost estimate for constructing the house, a registered sale deed, an allotment letter, and an approved copy of the building plan.

Home Loan Documents Needed for Salaried and Self-Employed Applicants

When applying for a home loan, you must gather several important documents based on whether you’re salaried or self-employed. Here’s a list of the required documents:

  • Completed loan application form.
  • 3 passport-sized photographs.
  • Identification proof.
  • Proof of residence.
  • Bank account statement/passbook for the last 6 months.
  • Signature verification by bankers of the applicant.
  • Statement of liabilities and personal assets.
  • Detailed property documents.
  • Original Salary Certificate from the employer (for salaried individuals).
  • Form 16/Income Tax Returns for the last 2 financial years (for salaried individuals).
  • Income Tax Returns/Assessment Orders copies for the last 3 years (for self-employed individuals).
  • Challans as proof of Advance Income Tax payment (for self-employed individuals).
  • Proof of business address (for self-employed individuals).
  • Income Tax Returns/Assessment Orders copies for the last 3 years (for self-employed individuals).
  • Challans as proof of Advance Income Tax payment (for self-employed individuals).

What is OC? What is its significance?

In real estate, OC stands for occupancy certificate. Once you’ve chosen a home, obtaining the Occupancy Certificate becomes essential. It’s a document issued by the local civic authority to confirm that:

  • The property is constructed per approved plans and regulations.
  • It complies with building codes and standards.
  • It includes necessary basic amenities.
  • All required clearances, including fire NOC, are in place.

An OC is ideally obtained from the builder once the construction is complete and the property is ready to be occupied. While OC isn’t mandatory during property registration, it holds vital importance. It might not seem crucial, but owners can miss out on basic facilities like water and electricity without an OC. In severe cases, eviction from the property can occur, especially if the project has violated environmental rules.

Read: Certificate of Occupancy: Understanding its Significance in Home Loan Applications

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