You can have many reasons to buy a new home. You may wish to open a business there or simply upgrade your lifestyle by switching to a bigger space. Whatever is the reason, it’s best not to exhaust your savings. Instead, you can apply for a home construction loan and pay it off gradually over a chosen tenure. A reputed lending bank can offer a home loan of ₹3 lakhs to ₹5 crores based on your eligibility. Want to enjoy the benefits of a home loan? Let’s learn everything about its application process.
Types of Property That You Can Buy With a Home Loan
- Builder property, ready-for-possession property or under-construction property
- Resale property or new property
- Property from state housing boards like Development Authorities Settlements, Apartment Owners’ Association, existing Co-operative Housing Society, MHADA, DDA and homes by private developers
- Gram panchayat properties and properties in regularised colonies and cities
- Self-constructed or multi-unit property
- Plot allotted by a Development Authority
- A house constructed on a plot of land or refinancing of residential property
- Construction on a leasehold or freehold plot
Eligibility Criteria to Apply for a Home Loan
Common Criteria
Nationality: Resident Indian or Non-Resident Indian (NRI)
Exclusive Criteria for Salaried Applicants
Age limit of the primary applicant: 23-60 years (for residents of India); 25-60 years (for NRIs)
Eligible job profiles: People working with MNCs, public sector/ private sector/ LLP companies, partnerships or proprietorship
Exclusive Criteria for Self-Employed Applicants
Age limit of the primary applicant: 28-70 years (Pick a loan term that ends before your age of retirement or 70 years, whichever comes earlier. That way, you can clear the debt before you retire.)
Documents Needed to Apply for a Home Loan
For Salaried Individuals
- Fully filled out loan application form with the applicant’s signature.
- Residence and identity proof like Job card issued by NREGA, Aadhaar card, Voter ID card and PAN card.
- Income proof like salary slips of the last 2 months, bank statements of the last 3 months or the latest Form 16
- Property documents (unless a property hasn’t been finalised)
For Self-Employed Individuals
- Fully filled and signed application form for a home construction loan.
- Residence and identity proofs like Aadhaar, Voter ID card and PAN card
- Income proof, for example, bank statement of the last 6 months, B/S (with schedules) and P&L accounts of the last 2 years and the latest 2 income returns.
- Property documents (unless you haven’t finalised any property)
For Self-Employed Non-Individuals
- Signed and fully filled loan application form
- Identity proof like MOA or AOA of the company, a copy of GST registration and PAN card
- Income proof like the last 6 months’ bank statements, last 2 years’ B/S (with schedules) and P&L accounts.
- Property documents (only if you’ve finalised a property)
Steps to Apply for a Home Loan
- Visit the nearest branch of the chosen lending bank.
- Fill out an application form for a home construction loan and submit it with the needed documents.
- Pay the required fee to allow KYC checks.
- Get the application reviewed by the experts in the bank. They will study your property, income, age and other factors.
- If you are eligible for the loan, it will be approved.
- Pay the applicable processing fee.
- The sanctioned loan amount will be disbursed based on the stage of construction of the chosen property.
Based on your requirements, you can also apply for a home renovation loan. If you buy a house with the help of a home loan, keep a thing in mind. You can later use the purchased property as collateral to apply loan against property when you require funds.