Home Loan Eligibility Criteria and Documents Required

Want to get a home loan but are unsure about how to begin? Well, the first step is to check whether you qualify for the loan. Check the criteria set by various lenders and assess how well you can fulfil these. This will help you get swift approval and better loan terms. These can include high loan amounts, low interest rates, and flexible repayment options. Let’s understand the eligibility requirements for a home loan in further detail.

To qualify for a home loan you are usually required to fulfil the following criteria:

1.For Salaried Individuals:

• Your age must be between 23 and 62 years

• You should have a work experience of at least 3 years

• You must have a monthly income of at least ₹10,000

2.For Self-employed Individuals:

• Your age should be between 25 and 70 years

• The business vintage should be at least 5 years 

• You must have an annual turnover of at least ₹2 Lakhs

3.Other Common Criteria:

• You should be an Indian citizen

• You should have a CIBIL score of 750 or more

• The property you wish to buy must belong to one of the following types:

  • Completed project

  • Under-construction project

  • Land/plot to construct a residential project
    
    

The home loan eligibility criteria may vary from one lender to another. So, check the requirements of your chosen lender before applying for the loan.

To apply for a home loan, some of the common documents you need to submit include:

• Duly filled and signed home loan application form

• ID proof: Any one of the following

  • Aadhaar card

  • Voter ID card

  • PAN card

  • Passport

  • Driving licence
    

• Address proof: Any one of the following

  • Aadhaar card

  • Voter ID card

  • Bank passbook

  • Ration card

  • Passport

  • Utility bills (telephone bill, electricity bill, water bill, gas bill)

  • Insurance Policy Receipt

  • Letter from a recognised public authority verifying the applicant’s address
    

• Age proof: Any one of the following

  • Aadhaar card

  • PAN card

  • Passport

  • Birth certificate

  • Class 10th marksheet

  • Bank passbook

  • Driving licence
    

• Income proof:

  • For salaried applicants - 

    • Form 16

    • Certified letter from the employer

    • Payslips for last 2 months

    • Appraisal/promotion letter

    • Income tax returns (ITR) for past 3 years

    • Investment proofs (if any) like FDs, shares, etc.

• For self-employed applicants - 

  • ITR for last 3 years

  • Business licence details

  • Balance sheet and profit & loss account statement of the company/firm (duly attested by a chartered accountant)

  • Licence of professional practice (for doctors, consultants, etc.)

  • Registration certificate of establishment (applicable for shops, factories, and other establishments)

  • Proof of business address

• Property documents like the sales agreement, allotment letter, etc.

Alongside these, you may be asked to provide some other documents. Get a complete list of the documents required and collate them beforehand. This results in a smoother application process. 

Here is a comprehensive list of all the property documents you may be asked to submit when applying for a home loan:

• Deed of Sale or Sale Agreement or Share Certificate (original) in case the property is located in a cooperative society

• Receipts for the taxes paid for the building and the land, certificate of possession, and certified sketch of the location of the property from revenue authorities

• Allotment letter from the society/housing board/private builder

• Receipts of advance payments in case of flat purchases

• Certificate of non-encumbrance encompassing the last 12 or 30 years

• Receipt of land tax payment and certificate of possession issued by the revenue authorities

• Approved building plan (showing floor plan for flat purchase)

• Original No Objection Certificate (NOC) issued under the ULC Act, 1976

• Copy of relative order if agricultural land is being converted

• No Objection Certificate (NOC) from builder/housing society

• A detailed estimate of the construction cost

• Letter from society/builder/housing board mentioning their bank and account details, for instalment remittance

• Report from a lawyer as per the standard format

• Report stating the valuation of property in the standard format by an empanelled valuer

• Power of Attorney for collecting original documents of the property 

• In the event of the demise of the borrower:

  • Letter requesting handing over of the property documents from legal heir/nominee(s)

  • Letter relinquishing the right to legal heirs/nominees for property documents handover 
    

There are several ways to improve your chances of securing a home loan. Here are some things you can do to improve your loan eligibility:

• Add a family member as a co-applicant

• Create an effective repayment plan 

• Ensure that you a have regular income and steady finances

• Provide details of any additional sources of income

• Maintain a record of the variable components of your salary, such as:
  1. Incentives
  2. Bonuses
  3. One-off monetary compensations

• Raise dispute and get the errors corrected in your CIBIL report (Typically, it takes a credit bureau anywhere between 30–45 days to resolve discrepancies)

• Build a strong credit history by making timely payments towards financial obligations and not having outstanding dues

By boosting your home loan eligibility, you can apply for a home loan to purchase your dream home with ease. Ensure you check these terms and start working towards improving the various factors under your control before you apply for a home loan.