Owning a home is synonymous with stability in our country. It is a widespread belief that a person has made it big in life if they own a house. There are a variety of residential properties available in the country. Whether it is a row house, a bungalow, or an apartment, people from different socioeconomic backgrounds can quickly get a house that suits their needs. Likewise, there is a wide range of housing loans available in the market to help you build the home you wish for. One such kind is a home construction loan.
The blog will cover all the documents you need for your home construction loan application. But let’s first answer this question –
What is a home construction loan?
A home construction loan is suitable for those who own or co-own a plot of land and plan to construct a house on it. The application approval of this home loan is different from other options as it takes the cost of the plot into account.
The home construction loan amount you can avail of depends on the eligibility criteria that vary from lender to lender. And after you meet the home loan eligibility criteria, the disbursement of the loan amount will ensue in the form of instalments or a lump sum. You may also utilise this loan for a partially-built home and complete its construction.
Additional Read: Home Construction Loan: Everything You Must Know
Documents required for availing a home construction loan
You must submit some documents to the lender when applying for a home construction loan. The documents applicants must submit depends on their occupation, financial condition, and residence status. The home construction loan documents required for salaried, self-employed and Non-Resident Indians (NRIs) are also different in some aspects.
Nonetheless, some documents are mutual in all cases
Common documents
- Age Proof
- Life insurance policy
- PAN Card
- Passport
- Birth certificate
- School leaving certificate
- Driving licence
- Address proof
- Bank statements
- Property tax receipt
- Utility bill
- Property registration documents
- Voter ID
- Existing loan details – These details must be provided through loan account statements
- Photo identity proof
- Passport
- Aadhaar Card
- Voter ID
- Driving Licence
- PAN Card
- Passport-size photographs
- Property related documents
- Duly filled loan application form
Documents required for salaried individuals
For salaried employees, lenders need to ensure applicants have a regular income stream and check if they work for a genuine government or private undertaking. So, in addition to the documents listed above, salaried individuals need to submit the following paperwork while applying for a home building loan.
- Income proof – A photocopy of the salary account bank statements for a period of last six months
- Processing fee cheque – Issued from salary account
- Salary slips – A copy of one of the following:
- Appointment letter
- Certified true copy form 16
- Salary slips for last three months
- Yearly increment letter
Documents required for self-employed individuals
If you are self-employed, you need to provide certain documents to lenders so they can assess your operation’s profitability and legality. So, compare interest rates and tenure from different lenders. And when you are ready to apply for a home construction loan, you must provide the following documents in addition to the common ones.
- Income proof
- Bank statements for the last six months of OD/CC facilities
- Operative current account statement for the last six months
- Last three years’ Profit & Loss Projection statement
- Processing fee cheque – Issued from your business account
- Business proof
- Business commencement registration certificate
- Your business profile on the letterhead
- Last two years’ income tax returns
Documents required for NRIs
Non-Resident Indians planning to build a house of their own in India need to provide the following documents when applying for a home building loan.
- Income proof – Overseas salary account details for Indian NRO/NRE account statements for the last six months
- Processing fee cheque – Issued from a business account or salary account depending on the status of the applicant
- Credit report – A credit report of the existing country of residence is compulsory for NRI applicants.
Additional Read: Home Loan vs. Home Construction Loan
Things To Keep in Mind While Applying for Home Construction Loan
- Apart from providing up-to-date documents and accurate details, you must also keep the following things in mind when applying for a home construction loan.
- You can choose between instalments and lump sum disbursal for loan amount disbursal.
- The frequency and number of disbursement instalments are linked to the loan amount and progress of construction.
- You can prepay your loan in part or full, given you have written approval from a lender who may also levy prepayment charges.
- To increase your loan eligibility, you can take a joint loan with your spouse, parents, children, and siblings.
In conclusion
Finding a reliable lender can be exhausting. But, fret not as Tata Capital’s home construction loan offerings will help you build your dream abode. With attractive home loan rates and minimal documentation, our housing finance solutions are easy and seamless.
Furthermore, if you want to figure out your potential EMIs before applying, log on to our website and use the home loan EMI calculator today!
07 June 2024
5 mins read
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