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Documents checklist before applying for a home loan

Buying a home is a massive undertaking. It requires the buyer to be patient, undertake meticulous research, plan every step carefully and thoroughly check alldocuments. The process of applying for a home loan is a significant stage in a home buyer’s journey.Before setting out to apply for a home loan, prepare a checklist of documents that you will require from the builder/society/associations so that you can have a relatively peaceful process. RoofandFloor sets down a list of documents required by potential home buyers in Bangalore.

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The Checklist

 Sale Deed/Title deed /Mother deed/Conveyance Deed – To establish ownership of seller on title of property. All previous Sale Deeds are required in original.

Sale agreement with Seller – Agreement between parties to fix terms and conditions for sale. It is a precursor to the Sale Deed. The agreement mentions time of completion of project and advance payment. For home loan, buyer must pay stamp duty equal to 0.10% of Sale Agreement value.

Katha Certificate and Extracts – Khata is required to register new property and can be obtained from Assistant Revenue Officer of the area. These documents are required to apply for utility connections. Khata Extract has details of the property like size of the property, use of property for residentialor commercial purposes, annual value etc.

General Power of Attorney – A legal instrument where by a person gives another person the authority to act as their legal representative and make legal/financial decisions like Sale/Purchase of Property. The GPA establishes if the previous Sale/Purchase was done by an authorised person.

Allotment Letter from the builder/co-operative society/Housing Board/BDA – The Builder/Housing Society will issue an Allotment Letter offering description and specifications of the property and payments made which helps the Banks/financial institutions to calculate the loan amount. Allotment Letters are issued only to 1st owner and other owners can demand copy of the Letter from previous owner.

Sale Agreement between Builder and 1st Owner– Sale agreement contains liability of the Builder to construct the building according to the plan approved by the local authority. The Agreementshould contain possession date, price to be paid by Buyer, frequency of payment instalments, stages of construction, and details like common areas and facilities.

Construction Agreement between Builder & 1st Owner– A construction agreement involves transfer or sale of the goods involved in contract execution.

Copy of Possession Letter from the builder– The Letter ensures possession of the building is delivered to the purchaser on the effective date specified in the letter.

Payment receipts towards the builder – Remember to collect original payment receipts from builder.

Any loan on the property (current or past) – Submit a list of documents with the vendor bank loan, closure letter with penalty and if the loan is closed, then copy of closure letter from the Bank to determine that the property is not mortgaged.

Latest Tax Paid Receipt from the date of registration up to date (Property Tax/Municipal Tax etc) – This shows property details like area, owner’s name and other specifications. Property tax is calculated on the value of the property being taxed and is levied by the local municipality authority.

Encumbrance Certificate for last 13 years (or from date of registration till date) – You can get this from the sub-registrar’s office. EC shows all transactions done on the property. The EC confirms ownership of property in the name of the Seller.

NOC from the Society/Building Association – This certificate mentions that the apartment owner’s association does not have any objection towards ownership transfer.

No-due certificate from the building association – The no-dues certificate confirms the owner has cleared all dues and the association is the custodian of all original documents.

Approved planof construction/extension & license for construction – The builder obtains this approval from the local development authority prior to beginning construction work.

Detailed cost estimate/valuation report from Chartered Engineer/Architect (if applicable) – Usually banks carry out property valuation before approving a loan to fix loan eligibility.

Conversion order/betterment charges paid receipt – This is legal permission by the owner to convert use of land from agriculture to non-agriculture purpose.

Layout approval plan sanction – This is sanctioned by the local development authority. Without this document, you will face issues with Khata transfer and plan sanction. Local development authority may even demolish any structure on the land as it would be deemed unauthorised.

Some other documents include: Auction Sale confirmation letter from local development authority; release deed (If applicable); completion certificate; occupancy certificate; loan/charge/mortgage by builder; deed of declaration; and latest electricity bill.

Along with this, you have to submit:

  • One colour passport size photograph
  • One photo identity proof (Passport/Pan Card/ Voter ID Card/Driving License)
  • Residence Address Proof (Passport/Ration Card/Utility Bills)
  • Residence Ownership Proof (Maintenance Bill)
  • Latest 3 month’s salary slips + Form 16
  • Current Employment Certificate
  • Bank Account Statement for the past 1 year
  • Advance Processing Cheque
  • Investment Proof (Fixed Deposit/Shares/Fixed Assets)

 

The process of gathering the relevant documents can sometimes be painful and discouraging. However difficult the path, don’t take any shortcuts. Your home is your asset; bought by your hard work and it is up to you to ensure that all documents are in order so there is no trouble tomorrow. If required, hire a property lawyer to help.

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