The article will tell us about  5 incredible facts which the borrower must ask his banker before taking a home loan. Before applying for a home loan borrowers should know everything about the home loans.

Documents needed for Home Loan Applicant

Documents required Salaried Self Employed
Application Form Signed with Photograph Signed with Photograph
Identity Proof
  • PAN card
  • Driving License
  • Aadhaar card
  • Voter id
  • Government-issued i-card
  • PAN card
  • Driving Licence
  • Aadhaar card
  • Voter id
  • Government-issued i-card
Address Proof
  • Passport
  • Driving license
  • Election id card
  • Electricity bill
  • Telephone bill
  • Bank statement
  • Bank statement
  • Utility bill
  • Copy of registry
  • Lease or rent agreement
  • TAN allotment number
Age Proof
  • PAN card
  • Passport
  • Driving License
  • Voter id
  • Birth certificate
  • School or college certificate
  • PAN card
  • Passport
  • Driving License
  • Voter id
  • Birth certificate
  • School or college certificate
Income Proof
  • Form 16
  • At Least 6 months salary slip
  • Bank statement of last 6 months
  • ITR of the last 2 years
  • Bank statement of the last 6 months.
Property Documents
  • Conveyance Deed
  • Sale deed
  • Possession letter
  • Allotment letter
  • Latest property tax receipts
  • Copy of approved plan for construction
  • Conveyance Deed
  • Sale deed
  • Possession letter
  • Allotment letter
  • Latest property tax receipts
  • Copy of approved plan for construction
Certificate of proof of business existence -nothing-
  • PAN
  • Sales tax
  • Excise duty
  • VAT
  • Service tax registration
  • Copy of partnership deed
  • Certificate of practice

Will the bank consider statutory expenses?

  • One smart question which the borrower can ask his banker before finalizing the home loan is about the inclusion of any statutory expenses.
  • This is because generally, the banks do not cover the statutory expenses like:
    • Stamp duty
    • The registration charges
    • Value Added Tax or
    • Service tax is to be paid as well as any other miscellaneous or legal charges.

Will the bank consider your insurance policies as additional collateral?

  • The borrower shouldn’t get disheartened if his bank says that the borrower is not eligible for the applied amount.
  • Even though the banks would tell the borrower the possibilities and a smart suggestion after knowing the fact that their logic can help him.

How will changing interest rates affect your home loan?

  • The fixed and floating interest rate dilemma has been traditionally one of the most difficult decisions for home loan borrowers.
  • Over the years with the fixed home loans becoming way high as compared to floating rate of interests, most of the home loans have been offered with the floating interest rate.
  • The interest rates offered which are offered by the banks depend on the RBI repo-rate which is however announced periodically.
  • A decrease in the repo-rate usually results in the low-interest rates.
  • Thus before finalizing the home loan, it is essential to check with the banker about how the changing interest rates would thus affect the home loan. There are different rates of home loans.

Does your bank allow home loan refinance?

  • Sometimes home loans may get difficult to repay due to a variety of reasons which includes financial crisis.
  • The borrower must ask the bank beforehand as to how it would be if the borrower requests for a balance transfer.

Does your bank offer the mortgage account with an overdraft facility?

  • The changing face of the home loan market has made the banks and the NBFCs to introduce various new features.
  • Overdraft on the home loans is one that allows the borrower to park the surplus funds in the loan account.
  • The borrower is free to withdraw the deposit and then use the funds in case he wants to invest in an attractive investment opportunity while the interest rate is charged on the remaining balance.
  • Instead of prepaying the home loan, the borrower can look at using the mortgage as an overdraft.

Many people thus still buy home loans without checking and then comparing the various aspects of it. Only the rate of interest is always taken as the one factor in finalizing a home loan agreement. There are however many other factors that the borrower must keep in mind and then discuss proactively with the banker before choosing the home loan deal.