Overview
A home loan, also known as a mortgage or housing loan, is a financial product that enables individuals to purchase or construct their own homes.
It is a long-term loan provided by banks, housing finance companies, and other financial institutions. The loan is secured by the property being financed, which serves as collateral.
These loans are offered by various financial institutions such as banks, housing finance companies, and non-banking financial companies (NBFCs).
Eligibility Criteria
01
Age
02
Income
03
Employment
04
Creditworthiness
Key Features
Loan Amount
The loan amount is generally determined based on factors such as the applicant's income, repayment capacity, and the property's value.
Interest Rate
Home loan interest rates can be fixed or floating. These rates vary among lenders and depend on market conditions and the borrower's credit profile.
Loan Tenure
The repayment period for home loans can range from 5 years to 30 years, depending on the lender and the borrower's preference.
Down Payment
Borrowers are usually required to make a down payment, which is a percentage of the property's value. The remaining amount is financed through the home loan.
Processing Fee
Lenders charge a processing fee, which is a percentage of the loan amount, for processing the home loan application.
Tax Benefits
Borrowers can avail of tax benefits on the principal and interest components of the home loan under the Income Tax Act, subject to specific conditions.
Documents Requirements
Basic
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Completed Loan Application
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ID Proof Aadhaar,PAN card,Driving license, Voter Id or Passport
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Address Proof Bank Statement or Utility Bills - E.g.- Electricity Bill / Water Bill / Property Tax
Income Proof for Self-Employed Individuals:
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Balance Sheet and Profit & Loss Statements: certified by a Chartered Accountant.
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Income Tax Returns (ITR) ITRs for the past 2-3 years, along with computation of income and tax paid
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Bank Statements Usually for Last 6 months' bank statements of your personal and business accounts.
Income Proof for Salaried Individuals:
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Salary Slips: Recent salary slips (generally for the last 3 to 6 months).
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Form 16: Income Tax Return form issued by your employer.
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Bank Statements: Typically, the last 6 months' bank statements showing salary credits.
Employment/Business Proof
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For Salaried Individuals: Employment certificate, appointment letter, or work experience certificates.
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For Self-Employed Individuals: Business registration documents, GST registration, professional practice certificate, etc.
Property Documents
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Agreement to Sell: A copy of the agreement made between the buyer and seller of the property.
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Property Title Deeds: Documents establishing the ownership and title of the property.
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Approved Building Plan: In the case of construction loans, the approved plan and necessary permissions.
Types of Home Loans
Home Purchase Loan
Home Improvement/Renovation Loan
Balance Transfer Loan
Home Construction Loan
Home Conversion Loan