List of Documents Required for Home Loan
10 Feb 2021
List of Documents Required for Home Loan
When you apply for a Home Loan, a bank needs proof to verify your identity and assess your creditworthiness, before sanctioning. It does that by requesting you to provide several documents. As such, you should ensure you provide all the documents required for Housing Loan as mentioned on the loan application form.
Here is a list of the primary Home Loan documents you need while applying for a home loan, along with specific documents required from salaried and self-employed Applicants.
Necessary Documents Required for Housing Loan
There are five types of primary Housing Loan documents you need to provide. These include
- The duly-filled and signed Home Loan application form available at your nearest Bank of Baroda branch or the bank’s website.
- 2 Passport size photographs; one of which should be attested on the application form.
- A copy of your identity proof document could be your PAN or Aadhaar Cards, passport, driver’s license, or voter ID card. Essentially, it should be any government-approved document with your photograph on it.
- A copy of your age proof eligible for the loan could be your PAN or Aadhaar Card, passport, driver’s license, birth certificate, etc.
- A copy of your address proof document could be your, Aadhaar Card, passport, driver’s license, bank passbook, utility bills etc. The document should have your permanent address mentioned on it.
List of Documents Required from Salaried Applicants
As a salaried individual, you need to provide all of the Housing Loan documents mentioned above. You also have to give a few additional, income-specific documents, enabling the bank to assess your eligibility. They are as under:
- A duly filled Form 16
- A letter from your employer certifying your employment status and the duration of your employment
- Your salary slips of the last 3-6 months
- Your filed IT Returns of the last three years
- Investment proofs (shares, fixed deposits), if any.
- Account statement showing credit of salary.
List of Documents Required from Self-employed Applicants
Self-employed applicants also need to provide a few additional documents certifying their source of income. These include
- Business address proof
- Their duly filed tax returns of the past three years
- Company Balance Sheet, Profit and Loss Statements, duly audited/attested by a Chartered Accountant
- Their business license/professional practice (for doctors, lawyers, etc.) documents
- Copies of registration certification for establishments like shops, factories, clinics, offices, etc.
- Account statement of business.
Property documents Required for Home Loan
Apart from your basic and income-specific documents required for Home Loan, you also have to provide the documents of the property you intend to buy through the loan. These include:
- A No Objection Certificate (NOC) provided by the society or the builder
- The original, registered sale deed, letter of allotment or stamped agreement of sale, provided by the builder
- Occupancy Certificate for ready-to-move-in properties
- Maintenance and electricity bills, along with property tax receipts
- Original receipts showcasing any advance payments made to purchase the property
- A copy of the building plan for purchasing flats, villas, bungalows, etc.
- Original receipt showcasing the land tax paid, along with possession certificate issued by the relevant authorities.
- Bank account statements showing any payments made to the seller or builder.
- A detailed estimate of construction costs (in the case of construction loans).
To ensure your loan is approved without any hurdles, you must provide all the Home Loan documents mentioned in the loan application form. You may also be required to provide few other documents based on your employment, property type etc. So do you have your documents ready? Go ahead; apply for a Home Loan from Bank of Baroda today!
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RAJESH KUMAR VISHWANATH SINGH23 October, 2021
I WANT HOUSING LOAN TRANSFER IIFL BANK TO BANK OF BARODA CHALTHAN BRANCH
Chilukoti durga malleswara Rao19 September, 2021
I DON'T HAVE FORM 16 AND IT RETURNS, BUT I HAVE SALARY CERTIFICATE CAN I GET HOME LOAN..
Know more about prepayment of a home loan!
If you are looking to reduce your debt burden, you should consider prepayment of home loan. As soon as your finances improve, you can choose to finish your home loan, either in part or in full. If you repay your home loan completely or in part before the scheduled tenure, it is called prepayment of home loan.
While most banks allow for a prepayment of home loan, some banks may charge a small fee for pre closure. It is, therefore, advisable to consider all the pros and cons of foreclosure before taking the plunge.
Who is eligible for a prepayment of home loan?
All home loan borrowers are eligible for pre closure, as long as their bank offers this facility. You can ensure that you have the option of prepayment of home loan at the time of taking the loan.
Most banks do not encourage prepayment as it causes a loss to them. When you decide to pay off a loan ahead of schedule, banks incur additional costs for rerouting the funds through credit channel. Therefore, banks may impose a fine for preclosing your loan.
That said, you are well within your rights to foreclose your loan—in part or full—if it gives you long-term benefit. If, even after paying the fine, you are saving on the interest you pay every month, it is worth foreclosing the loan.
How to do prepayment of home loan?
There are many ways in which you can prepay your home loan. You can either go all out and completely repay the loan ahead of schedule or you can pay off a part of your debt. You can also work on a combination of the two.
Start small, go up gradually: One way of prepaying your home loan is starting with a small prepayment in the beginning of the loan and to increase this amount every year at a constant rate. You can do so by saving through the year and spending your savings on prepayment.
Fixed prepayment: You can do this by prepaying a fixed amount towards your principal every year. This you have to do over and above your EMI payments. Plan your expenses through the year and make a fixed saving every year. Spend this saving on prepayment to reduce principal.
Higher EMI: Another way of reducing your principal is by paying more than your calculated EMI. Every month make a payment that is slightly higher than your EMI. This goes a long way in reducing your debt burden.
Full repayment: If your finances have improved tremendously or if you have been able to mobilise a large sum of money, you can completely pay off your loan ahead of your tenure. You may, however, have to pay a fine for full prepayment of home loan.
Home loan prepayment rules
The Reserve Bank of India (RBI), from time to time, revises the rules it has set for “Levy of foreclosure charges/ pre-payment penalty on Floating Rate Loans”. It specifies the conditions in which banks and housing finance corporations (HFCs) can charge prepayment charges.
When are banks and HFCs allowed to charge prepayment fees:
Home Loan is taken by non-individuals: When a company or firm borrows funds in the form of housing loan, it is not exempt from foreclosure charges.
Fixed-Rate Home Loan: If you have taken a fixed rate home loan, you will be levied a foreclosure charge for prepayment of home loan. A fixed-rate loan is when the rate of interest is the same throughout the loan tenure. Both banks and HFCs are allowed to levy a penalty on foreclosure of home loan. HFCs, however, can charge a penalty only if you are repaying the loan by borrowing from another bank or HFC. HFCs cannot charge any prepayment penalty if you prepay the loan with your own funds.
Dual rate home loans: Banks are allowed to charge a penalty for foreclosing a dual rate home loan, which is a combination of fixed rate and floating rate of interest. In such cases, the interest rate is fixed for the first few years and then becomes variable.
When are banks and HFCs not allowed to charge prepayment fees:
Floating rate home loan for individuals: Home loan prepayment rules state that prepayment charges or penalties are not levied on borrowers for taking a floating rate home loan. No extra charge is levied on either part or full payment of the loan.
Paying fixed rate home loan from HFCs with own funds: HFCs can not charge prepayment penalty on fixed rate home loan if the individual is repaying with his/ her own funds.
Dual rate home loan: Both banks and HFCs cannot charge a penalty if the borrower prepays the loan after it has shifted to variable rate scheme and has become a floating rate loan.
Prepayment of home loan may not always be the right decision. Only if the long-term benefits surpass the penalty to be paid, should you consider prepaying your loan. If you plan your prepayment well, you may be able to save a lot on interests.
Reasons to Consider a Home Loan Balance Transfer
Reasons to Consider a Home Loan Balance Transfer
Home Loans make it possible for you to invest in a property of your choice. The property could be a ready-to-move-in home or an under-construction property, or a plot of land on which construction will be carried later on. You may also avail loan from any bank/NBFC. Even though you may have started repaying the loan availed from other bank/NBFC, there could be times when you may not want to continue with that lender. Fortunately, you can change your lender and move to another, offering a better deal, by opting for a Home Loan Balance transfer. Let's know more about it in this article.
What Is a Home Loan Balance Transfer And How To Transfer My Home Loan?
A Home Loan balance transfer is a unique facility that enables you to transfer your existing Home Loan to another lender. If you are unhappy with your current Home Loan provider or paying a higher interest rate, you can opt for a Balance Transfer. You can now complete the Home Loan balance transfer process online through the Bank of Baroda website. The entire process is streamlined for your convenience. You need to provide us with the details of your existing Home Loan, lender's name, and the loan amount you intend to transfer. Yes, a Home Loan balance transfer can prove incredibly beneficial. Let's understand when you should opt for it and the benefits of transferring the loan.
When to Opt for Home Loan Balance Transfer Process?
Having explained what is balance transfer loan, let's understand when you should opt for it.
When there's a chance to reduce the overall cost of your Home Loan
The most obvious reason to consider a Home Loan balance transfer is to reduce your Home Loan's overall cost. A Home Loan can work out to be quite expensive in the long run as it involves interest in each installment. So, if there is a chance to save money by transferring the loan to a new lender, you should consider it. However, it would help if you remembered calculating the cost of transferring the loan, the processing fees, etc., and then deciding to move the loan.
When there's a chance of getting a reduced interest rate on your Home Loan
You can consider opting for a Home Loan balance transfer if you come across a lender offering an interest rate lower than that provided by your original lender. When it comes to Home Loans, a lower interest rate can result in significant savings in the long run even by a few decimals. If your calculations show that a reduced interest rate can result in savings, you can opt for the balance transfer loan.
When there's a chance of changing your EMI amount or loan tenure
If you are struggling to pay your loan EMIs, and want to reduce the EMI amount, you can check for a lender who can offer a chance to modify the EMI amount. A lower EMI can make the loan more affordable but may increase the loan tenure. Alternatively, you can increase your EMI amount and reduce the loan tenure as well.
When you need additional loan amount for extension/repair/renovation
Benefits of Home Loan Balance Transfer
Now that we know what is balance transfer loan, let's look at its many benefits:
As mentioned above, opting for a Home Loan balance transfer from one lender to another can reduce your EMI amount to quite an extent.
A balance transfer loan can also result in a reduced interest rate on your Home Loan, which, in turn, promotes higher savings.
Opting for the Home Loan balance transfer process can also help enhance your CIBIL scores, proving beneficial when you need other loans in the future.
When you've paid all EMIs on time, opting for a balance transfer gives you the upper hand in negotiating the loan's interest rate and terms with the new lender.
Opting for a balance transfer is especially beneficial if you are not satisfied with your original lender's facilities and services.
To be eligible for a Home Loan balance transfer, you should ensure that you've paid all EMIs on time, without defaulting. The bank considers your credit repayment behaviour and your current credit score before approving your request. Indeed, a Home Loan balance transfer can result in significant savings. So, get the best Home Loan services with Bank of Baroda. Click here to transfer your existing loan from another lender to ours!