Written by Housing Loan:
Housing Loan plays a vital role in buying your dream home. There are a number of banks and financial institutions that offer housing loans for lower interest rate. There are a number of formalities while applying for a housing loan. These formalities start from submitting application to disbursement of loan amount. You must keep some of the basic documents ready for saving your time and efforts.
Documents Required
For sanction of housing loans by a bank, you need to submit basic documents along with application. These documents determine the rate of interest and amounts to be sanctioned as housing loan. The amount varies for each person depending upon their repayment capacity and credit rating. Following documents are essential for getting sanction of home loans.
- Duly completed application form with Passport size Photo
- Repayment Track record of existing loans (if any) or No Due Certificate
- Photo and age proof
- Residence Address proof and signature verification proof.
- Copy of Sanctioned plan and sanction letter
- Cheque
Additional documents required for salaried people are as follows:
- Bank Statement for 6 months (Operating Account in case of self occupied)
- 3 year’s Income Tax return details
- Tax Challan, Balance sheet and Profit/Loss Account for last three years In Case Of Salaried
- TDS Certificate and Identity card
- Bank Statement of Salary Account for 6 months
- Last three months salary slip and Form 16
Tips for Home loan
- Affordable Price: You need to do some homework before applying for Home loan. You need to know how much you can afford. It depends on various aspects such as your monthly expense, current salary or income, credit rating, down payments and interest rate, dependents and so on.
- Compare Cost: There are number of banks that compete to offer home loans at low interest. You need to check the rate of interest and compare with other banks.
- Choose right home or place: Before you applying for a Home Loan you choose a appropriate home which suits to you and your budget. You need not make hurry in choosing a home. Then check all the documents and make sure with your Bank whether they will sanction the loan for the selected property or not.
- Insurance: There are various insurance for your property such as insurance from fire, disaster and so on. Lender requires that you have insurance for your property to safeguard their interest. This is not compulsory in some banks.
- Sign or close the deal: Following these tips step by step will help you close the deal smoothly and you can sign final settlement. The property or dream home is yours now. If this is your first property transaction, realtor will help you in each and every step to help you owe the property.
Types of Home Loans
Home Loan is mostly used for purchase of new home or property. Most of the borrowers consider home loan is only for buying a home or property but there are different home loans for meeting different needs. Some of them are as follows:
Home Purchase Loans: This for purchase of new home and most of borrowers use this type of loan in purchase of new home or property. These are very common and are basic home loans.
Home Improvement Loans: It is a loan sanctioned or disbursed for the repairs or renovation in existing home. This is very helpful for borrowers who wish to renovate or implement some repair works in existing home or property.
Home Extension loans: This is a loan given for extending or expanding existing home. This can be used for modification of rooms or adding an additional or extra room.
Land Purchase Loan: It is the loan sanctioned for the purchase of land. Land can be either for construction or investment purpose. In this Loan the property documents should be very clear and without any litigation. Most of the bank will not provide any loan for this type of loan unless the documents is clear.
Home Construction Loan: The loan is available for construction of new home. It is a loan sanctioned for constructing a home in existing land or property.
Home Conversion Loan: This loan sanctioned for existing borrower who have financed present home with home loan and wished to move new home which needs an extra funds. This loan helps to transfer existing loan to new home with extra amount and helps to avoid pre-payment charge of previous loan.
Bridge Loan: Bridge loan is a loan for those who want to sell existing home and buy a new home. This loan helps you to finance new home until you find a buyer for existing home.
