Posted by Proper and complete documentation is the key that unlocks the successful approval of any loan application. It is especially true for Housing Loans, where the property documents are the security against which a lender grants a Home Loan to the borrower.
And this is where people might default, as property document insufficiency is the most common reason for a Home Loan application rejection.
A Home Loan borrower needs to submit the usual KYC (Know Your Customer) documents, including identity proof, address proof, and proof of income, along with these property documents. A lack of complete understanding of these documents may make it hard to furnish the complete set of property documents the lender wants for the loan processing.
Use the loan against property calculator and know the appropriate loan amount. Based on the monthly loan repayment commitment, it will generate.
Read further to know in detail about the Home Loan documents list required to apply for a Housing Loan.
List of Property Documents Required for a Home Loan
- Sale Agreement: It is a written document that acts as an agreement between the seller and the buyer for the sale of immovable property. This agreement contains all the terms and conditions for the property sale.
- Sale Deed: This is the primary proof of property ownership. A Sale Deed is different from a Sale Agreement. It is provided to you when a promise to sell a property becomes a reality. A sale deed is an essential document for a Housing Loan. Without the original Sale Deed, a person cannot sell, purchase, or do construction on a piece of land. Once the borrower repays the Home Loan, the lender returns the original sale deed.
- Extracts or Khata Certificate: The Extract or Khata Certificate is proof that the property against which a customer is availing a Home Loan. This shows the property is duly registered in the municipal records of the city and the construction on the property is in line with the approved construction plan. The homeowner will also require this document when transferring the property’s ownership.
- Memorandum for Deposit of Title Deed (MODT): A Home Loan customer needs to submit the MOTD, which is an undertaking that they have deposited the documents related to the property’s title to the lender. When the customer repays the Housing Loan, the bank cancels the MODT and issues a Deed of Receipt.
- Copy of Property Map: A property map verifies that the construction of a property is legal and follows the rules and regulations of the statutory body. A Home Loan customer has to submit the property map to the lender for verification.
- Allotment Letter from Builder: A home buyer has to obtain an allotment letter from the builder or the housing society from where they are purchasing the property. The allotment letter contains the description of the bought property. It contains information about the home buyer’s down payment to the seller so that the lender can provide the remaining amount.
- Power of Attorney: This document tells if an authorised person is carrying out the previous sale or purchase of the residential property on behalf of the seller/buyer.
- No Objection Certificate (NOC) from the Housing Society: The builder or the housing society provides the NOC, stating that there is no further objection regarding the property.
- Possession letter: This letter mentions that the seller is transferring possession of the property to the buyer on the date mentioned in the document.
- Payment receipt and the latest Tax Receipts: The home buyer has to collect the payment receipt from the builder and submit it to the lender. Home buyers get the tax receipts from the last property owner to ensure that there are no tax dues on the property.
With these property documents in place, one can confidently apply for a Home Loan and boost their chances of getting the loan approved. Leading banks offer Home Loans starting at interest rates as low as 8.65% per annum. Take the benefit of a loan against property calculator to find out the EMI payable towards the Housing Loan.