Buyer's Guide - Home Loan

One of the biggest expenditure in a person's life is purchasing a home. Home loans help you in making your dream come true of buying your own house and also helpful in saving tax. But sometimes, the procedure of applying and getting a home loan can be complicated and frustrating. To avoid hassles and save cost, you must choose the right home loan.

Nowadays many companies have come in home finance sector and they offer attractive schemes with lower interest rates but it is advisable for you to first understand their terms and conditions and aggrement carefully.

You know your earninig very well and you know how much you can spend and where to spend. While calculating EMI (Equated Monthly Instalment) you should consider every thing like your other liabilites, your nature of job etc. Once you are assured that you can easily pay the EMI then only proceed for it.

When you go for loan you should carry all the required documents. Your history of previous loan payment or credit card bill payment should be neat and clean. It will be an added advantage for getting higher loans.
You should be aware of additional charges which lender charges you in the name of administrative and service charges or processing fees.

Other than Housing Finance Companies you can get loans from Banks and insurance companies. You can get loan against your Provident Fund Account, Fixed Deposits, Post office Savings; shares and debentures of listed companies and government bonds and securities.

Documents required for loan are
  • Latest salary slip (proof of income for salaried individuals)
  • Photographs
  • Proof of age
  • Identity papers
  • Proof of residence
  • Bank statements for the previous six months
  • For self-employed : Certified copies of balance sheet, profit and loss statement and tax challans / tax returns for the previous 3 years.
  • For partnership /private limited companies : The Articles of Association, partnership deed and details about the firm.
  • For NRIs: Latest salary certificate specifying name (as it appears in the passport), date of joining, passport number, designation, salary and perquisites, photocopy of labour card / identity card, photocopy of valid resident visa stamped on the passport, photocopy of monthly statement of local bank account and other property related documents.