What is Home Loan

Home loan is a loan advanced to you by a financial institution in return for security over. The property you are using the home loan to buy. Typically a home loan will be a 25 or 30 year term, with regular repayment amounts fortnightly or monthly. That are designed to pay off the loan over the contracted term.

Home Loan is a Secured loan offered against the security of a house/property. This is funded by the bank loan, the property could be personal property or commercial one.

The home loan is a loan take by a borrower from the bank issue against. The property/security intende to be bought on the part by the borrower giving. The banker a conditional ownership over the property.

Types of Home Loan:-

The types of home loans available in the financial market are describe below:-

Loans for Home Purchase – The most popular type of home loan is for purchase of a new. This loan is also commonly available and is offer by many banks in different variants. The interest rate is either floating or fixed and generally ranges. Anywhere between 9.85% and 11.25%.

House Expansion or Extension Loans – Want another balcony or an additional bedroom. No worries, some banks also offer loans for house expansion including alteration of current structure. And construction of new rooms.

Loans for Purchase of Land – Several banks offer loans for land purchase. Purchasing a land is a flexible option. The buyer can save funds and construct a house whenever his finances allow investment.

Home Conversion Loans – People who have already availed a home loan and have purchased a house with it. But want to moves to a new house can opt for home conversion loans. By transferring the current loan to new house.

Loans for Home Improvement – Renovation and repair works like external and internal repair, painting. Construction of overhead water tank and electrical renovation certainly will make your house look better. But if you lack the finances for repair and renovation.

Balance Transfer Home Loans – This option can be availeable an individual want to transfer. His home loan from one bank to another bank owing to reasons like lower interest rates. Or better services offered by the other bank.

Types of Home Loan

Bridged Loans – Bridged Loans are short term loans that are designed for existing homeowners. Who are planning to purchase a new property. It aids borrowers to fund the purchase of new house until a buyer is identified for the existing property.

NRI Home Loans – Specially designed to support non-resident Indians in buying a residential property in India. The formalities and application procedure for this type of loan is different from the others. Generally, most of the private and public sector.

Stamp Duty Loans – Not a widely known segment of home loans. Stamp duty loans are offered to cover the stamp duty charges during the purchase of a property.

Loans for Construction of a House – Who want to construct a place according to their wishes rather than buying a pre-constructed house. The approval process for this type of loan is different for it takes into account the cost of plot also.

Checklist of Documents Home Loan Required

  • Identity Proof: Passport/ Driving License/ Voter ID/ PAN
  • Address Proof: License/ Registered Rent Agreement/ Electricity Bill (up to 3 months old), Passport
  • Employment Appointment Letter: Required if the current employment is less than 1-year- old
  • Financial Documents:-
  1. 6 month bank statement
  2. 3 month salary slip
  3. 2 year Form 16
    List of Common Documents Home Loan
  • Complete Home Loan Application Form with one passport size photograph.
  • Photo Identity Proof: Passport/ Driving License/ Voter ID/ PAN
  • Residence Address Proof: License/ Registered Rent Agreement/ Utility Bill
  • Residence Ownership Proof: Sale deed or rental agreement
  • Income Proof: salary slip, bank statement and Form 16
  • Job Continuity Proof: Appointment letter at employment and validation letter from HR
  • Bank Statement: Past 6 months’ document
  • Property Documents: Sale deed, Katha, transfer of ownership
  • Advance Processing Cheque: A cancelled cheque for validation of bank account
  • Investment Proof: LIC, mutual funds, property document etc.
  • Financial Documents:
    a. For Salaried Individual: 3 month salary slip, Form 16 and bank statementb. For Self-Employed Individual: IT returns for last 2 years along with computation of income tax for past 2 years certified by a Chartered accountant

    c. For Self-Employed Non- Professionals: IT returns for last 3 years along with computation of income tax for past 2 years certified by a Chartered accountant.

Documents Required for Salaried Individual

  • Loan Form: Bank loan a fill application form with passport size photos
  • Address Proof: Leave and License/ Registered Rent Agreement/ Utility Bill (up to 3 months old), Passport
  • Identity Proof: Passport/ Driving License/ Voter ID/ PAN
  • Income Proof: 3 month payslips, 2 years Form 16, Copy of Income Tax PAN
  • Bank Statement: 6 months bank statement that shows salary from the employer and any EMI paid for outstanding debit.

Documents Required for Self Employed– Professionals

  • Identity Proof: Passport/ Driving License/ Voter ID/ PAN
  • Address Proof: License/ Registered Rent Agreement/ Utility Bill
  • Office Address Proof: Property Documents, Utility Bill
  • Office Ownership Proof: Property Documents, Utility Bill, Maintenance Bill
  • Business Existence Proof: 3 years old Saral Copy, the Company Registration license, Shop Establishment Act
  • Income Proof: Latest 3 years Income Tax Returns including Computation of Income, Profit & Loss Account, Audit Report, Balance Sheet, etc.,
  • Bank Statement: Past 1 year bank statement
  • 1 passport size color photograph

Documents Required for Senior Citizens/Pensioners:

  • 1 passport size color photograph
  • Photo Identity Proof: Passport/ Driving License/ Voter ID/ PAN
  • Residence Address Proof: License/ Registered Rent Agreement/ Utility Bill
  • Age Proof: Pan Card or Passport
  • Income Proof: Pension Returns Or Bank Statement

Home Loan:- Features and Benefits

The helps you to buy your dream home. Loans are tailore for different house hunter. You can check your home loan eligibility online. And also use the Home Loan EMI calculator to know how much EMI you will have to pay for your home loan.

3 thoughts on “What is Home Loan”

  1. I have not checked in here for a while because I thought it was getting boring, but the last several posts are good quality so I guess I’ll add you back to my everyday bloglist. You deserve it my friend 🙂

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