Understanding the Paperwork: Documents Checklist for Home Construction Loans

Introduction

How does Home Construction Loan work?

A home construction loan will help you fulfil the dream of constructing your dream home just the way you want it.

In order to get a home construction loan, there are certain eligibility criteria that one must follow before getting started. The disbursement takes place after you fit the eligibility criteria; you will receive either the lump sum amount or in instalments.

Now, let’s get into what would be the home construction loan documents required:

It’s important to keep in mind that without the important documents, it may be close to impossible to get the loan you wish for. Therefore, keep the documents in place in order to acquire a home construction loan.

The home construction loan documents depend on the occupation, income and residence status. The construction documents vary depending on whether the borrower is salaried, non-salaried or Non-Resident Indian (NRI).

Below are some home construction loan documents required:

Documents Required:

The home construction loan documents required are more or less similar to a regular home loan, but may vary depending upon various factors. Below are the documents required to apply for a home construction loan:

List of papers/ documents applicable to all applicants:

• Employer Identity Card
• Loan Application: Completed loan application form duly filled in and affixed with 3 Passport size photographs
• Proof of Identity (Any one): PAN/ Passport/ Driver’s License/ Voter ID card
• Proof of Residence/ Address (Any one): Recent copy of Telephone Bill/ Electricity Bill/Water Bill/ Piped Gas Bill or copy of Passport/ Driving License/ Aadhar Card
• If you have any previous consumer loans, then you must submit a Loan A/c statement for the last 1 year, every loan is displayed on the CIBIL platform.
• SBI Account is compulsory for Home Loan.
• Bank's provided format of Power of Attorney (In case of NRI and Defence Personnel only)
• Surakshit home loan / Rinnraksha consent letter. (Premium as per age and repayment term)

Property Papers:

• Permission for construction (where applicable)
• Registered Agreement for Sale (only for Maharashtra)/Allotment Letter/Stamped Agreement for Sale.
• Occupancy Certificate (in case of ready to move property)
• Share Certificate (only for Maharashtra), Maintenance Bill, Electricity Bill, Property Tax Receipt
• Approved Plan copy (Xerox Blueprint) & Registered Development Agreement of the builder, Conveyance Deed (For New Property)
• Payment Receipts or bank A/C statements showing all the payments made to Builder/Seller

Income Proof for Salaried Applicant/ Co-applicant/ Guarantor:

• Salary Slip or Salary Certificate of last 3 months (If the salary does not contain bonus/incentives etc, then salary slips of the respective month where bonus/incentives are credited)
• Bank A/C Statement (Salary) for the last 6 months
• Employer Certificate, Appointment Letter, Increment Letter, Promotion letter (any one) Duly Attested by employer.
• Copy of Employee I-Card
• If your present job is lesser than 2 years, relieving letter from the last employer
• Copy of Form 16 for last 2 years or copy of IT Returns for last 2 financial years, acknowledged by IT Dept.

Income Proof for Non-Salaried Applicant/ Co-applicant/ Guarantor:

• Business address proof: Udyog Aadhar, Utility Bill, Agreement to rent for business, etc. (any one).
• IT returns for the last 3 years.
• Balance Sheet & Profit & Loss A/c for last 3 years.
• TDS Certificate (Form 16A, if applicable).
• Certificate of qualification (for C.A./ Doctor and other professionals).
• Bank A/c Statements (Business) for last 2 Years and personal A/c Statements for the last I Year.
• Form 26 AS/ Advance Tax paid Challan (Downloaded from Traces site).
• Business proof: Sales Tax Registration (if applicable).
• Proprietor- Gumasta Licence, Udyog Aadhar, etc.
• Partnership- Pan card, Partnership deed and Trade Licence, LLP- Firm Registration, Certificate of Incorporation.
• Company- AOA, MOA, Certificate of Incorporation.
• Certificate of qualification (for CA/ Doctor).
• GST Registration and CIST Return (if applicable).
• Opinion report of Firm/Co. If a loan is taken from financial Institutions.

Features and Benefits of SBI Regular Home Loan

• With SBI Home Loan products, all the customer’s needs are taken into consideration, and provided with loans that are best suited for you.
• Low Interest Rates are something of benefit that is provided. The interest rates depend on copious factors like your CIBIL score, income, occupation and employer profile, as well as the loan rate.
• A Low Processing Fee is mostly charged.
• No Hidden Charges.
• No Pre-Payment Penalty.
• Interests are charged on Daily Reducing Balance.
• Repayment up to 30 years are provided.
• Home Loan is available as Overdraft.
• When it comes to interest, women are given concession.

Eligibility Criteria for Construction Loan

Here are some of the key eligibility criteria for availing a home construction loan:

• A home construction loan is offered to Residents as well as Non-Resident Indians (NRIs).
• The age of the applicant is another crucial factor when it comes to applying for loans.
• The home construction loan is provided to salaried and self-employed individuals as well.
• Having the required documents are important in order for the disbursement to take place.
• The borrower who takes out a loan can also add a salaried family member as the co-owner.
• The CIBIL score of an individual must be promising, as the credit score being 750 and above will significantly improve your scope of getting a loan.
• You are allowed to choose between a lump sum loan or instalments.

Conclusion:

Applying for a home construction loan is much better than spending your personal finance on construction. Get the documents right, have a good CIBIL score, and your good to go. You might even get a low-interest rate if your Credit score is high. Happy house hunting!