HOME LOAN INCOME DOCUMENTS.

Owning a home is not only an emotional decision, but  a good investment decision too. The ever increasing real estate prices have time again proved it. The house is no more a living space, but   also  a primary  stakeholder in your asset list.   The property prices have gone beyond the reach of a common man due to which  the dependency on Home Loan has increased manifold. An individual   has to heavily depend on Banks and Financial Institutions for a Home Loan. Government through RBI is doing a lot in  this sector with attractive finance schemes and greater transparency.  The liberalization has made the process easy now one can easily get a loan according to his /her requirement. There are many players which are offering housing loans in Delhi NCR and you can categorize them into two categories for your convenience, Nationalized Banks and Private Banks/NBFC’s. You can nowadays  get a customized deal, according to your need. We will highlight the process in a greater length in this blog, the topic is the Income Documents. Bank /FI’s (Financial Institutions) mainly depend on income source to derive the Loan Amount.  We  will mainly focus on Income Documents in this chapter we will try and understand the different kind of documents Financial Institutions ask for processing your Home Loan Application.

Income is one of the most important factors which goes into calculating your loan amount figure. The Income may have many sources which   can be from Salary, Business, Consultancy, Rental, Interest etc. To consider these sources one should have documents to prove that, which in India as per IT Act are  the Income Tax Returns. The IT Returns  defines the source of income, Amount of Income Duration and etc. These documents clubbed with  each other are called income documents.

Income: There are mainly two type income source’s people have in India, Salaried and Self Employed.

The Salaried category consists of Individual working for Govt Sector.Private Sector, MNC’s. The Govt sector will include all Central/State Govt offices, Public Sectors, Autonomous bodies and other organizations where Govt is the employer. The Private Sector will have all Indian Companies and MNC companies those who are Based in India. The income documents of a Salaried person are Salary Slip/FORM 16 and Bank Statements. The total vintage or work experience of 3 years is required, this may not necessarily be in one Company but all companies put together in last three years. The Salary Slips is a document which gives detailed description of Monthly Income, and since the Installment is paid on a monthly basis, we will do our Loan Calculation of this amount.

SALARIED INCOME DOCUMENTS:

1. Last 3 Months Salary Slip.
2. Bank Statement of Salary A/c for Last Six Months.
3. Form 16 for Last 2 Years /ITR for Last 2 Years.

The above documents will determine the credit worthiness of the Loan applicant. In Home Loan the co – applicants can also be added for enhancing the Loan Amount. The maximum two applicants can be added to a Home Loan Application for increasing the Home Loan Limit. The home Loan calculation for the salaried is always done on the basis of fixed component which an applicant earns every month, the variable component in the form of Overtime, Bonus and Performance based incentive is not included while calculating the eligibility of the Customer. Pension income is not considered in the Loan calculation. The period of Loan would depend upon the retirement age of the customer, if the customer works for a Pvt firm where retirement is not specified, then the Bank will consider 60 years as retirement age and calculate the Loan eligibility. The pension income can be considered in very special cases, in that case the Loan tenor can even go up to 70 years, but this will vary from bank to bank.

Self Employed Income Documents:

The Self Employed Segments can be divided into three categories:

• Proprietorship
• Partnerships
• Private Limited.

Proprietorship:

1. Income Tax Returns for Past Three Years with Computation of Income.
2. Balance Sheet and Profit and Loss A/c for Last three years.
3. Bank Statement of the Current A/c for Last six Months.

Partnership Companies:

1. ITR+ Computation of Income of All partners for Last Three Years.
2. Partnership Deed.
3. Balance Sheet and Profit and Loss A/c for Last three years of the Partnership Company.
4. Bank Statement of Partners Individual a/c and Partnership A/c for Last 6 months.

Private Limited Company:

1. ITR+ Computation of Income of All Directors for Last three Years.
2. Balance Sheet & Profit and Loss a/c for last three years.
3. Auditor Report Form C & D.All schedules and Annexures to be enclosed.
4. Memorandum of Article of Association.
5. Bank statement for Last six months of All Directors and Pvt Ltd Company.
6. Ownership Proof of Partnership and Private Ltd Company.

  The personal documents to be attached with the file are as below:

1. Age/ID/Residence Proof of All Proprietor/Partner & Directors.
2. PAN of ALL including the Partnership Company and PVT Ltd Company.
3. TAN /Service Tax Registration/VAT Returns.
4. Copy  Sanction Letter and Loan track if the borrower is current on a loan.

Though i have made an exhaustive list of Income Documents for a Home Loan file but the credit can ask for more case specific documents based on the profile of a Borrower.

Kindly connect with us at dbisht@yahoo.com for Home Loan and Loan Against Property related query in Delhi NCR. 





Home Loan, Loan Against Property, Construction Loan, Top Up Loan, Home Loan BT, Home Loan Delhi NCR.