Six steps to a home loan

1: Submission of loan application

The
first step involves filling up the application form of the housing
finance company (or bank) along with the required documents. A one-time
processing fee will also have to be paid at this stage.

Income documents needed:

If you are employed

• Verification of employment form.
• Latest salary slip/salary certificate showing all deductions for at least the past six months.
• Form 16 from your employer for the past three years.
• If your job is transferable, permanent address needs to be provided.
• If
  you have been in your present employment / business or profession for
  less than a year, mention details of occupation for previous five
  years, giving position held, reasons for change and period of the same.

If you are self-employed

• Balance
  sheet and profit and loss account of the business/profession along with
  copies of individual income tax returns for the past three years as
  certified by a chartered accountant.
• A note giving information
  on the nature of the business/profession, year of establishment,
  present bankers, form of organisation, clients, suppliers, et cetera.
• Your net worth as an applicant/co-applicant.

2: Submission of property documents

• Title deeds of the builder/land owner for a period of at least 13 years.
• Development agreement between the builder and land owner if applicable.
• Power of Attorney executed in favour of the builder, if applicable.
• An
  encumbrance certificate for the past 13 years. An encumbrance
  certificate is  report issued by registrar of assurances or
  sub-registrar's office after due verification of the relevant documents
  certifying that the property in question is free from all encumbrances
  such as mortgages, leases, easements or restrictions.
• A khata
  certificate. This certificate is the basic document indicating
  ownership of property as entered in the register of the government
  authorities.
• Up-to-date tax paid receipts of the property.
• A sanctioned plan and licence.

3: At the housing finance company branch

• An agreement for sale and a construction agreement with the borrower.
• A comprehensive legal scrutiny will be done.
• Pre-sanction inspection of the property will be carried out.
• Credit appraisal and personal interview.
• Following this, a sanction letter will be issued.
• Acceptance of sanction letter. Administrative fee to be paid at this juncture.

4: Final documentation for the loan

• Tripartite agreement between the borrower, builder and the housing finance company to be submitted.
• Proof of investment of margin money to be submitted.
• Loan papers to be signed by the applicants.
• Your guarantors should execute the guarantee agreements.
• The original documents executed with the builder to be submitted.

5: Disbursement of the loan

• Inspection of the property will be carried out to ensure progress of work done.
• Following
  this, there will be a release of loan amount directly to the builder to
  coincide with the progress of work done as per the agreement with the
  builder.
• No objection certificate from the builder to mortgage the property in favour of the housing finance company to be obtained.
• No
  objection certificate to be obtained from other housing finance
  companies if the builder has availed a project loan, to release the
  mortgage right over the flat to be financed by the company you are
  securing the loan from.

6: After release of the loan amount

• Receipt to be obtained from the builder for the amount released.
• The sale deed, duly registered, must be obtained.
• In addition to this, an up-to-date tax paid receipt would be sought.
• An encumbrance certificate will be deemed necessary.