Buying a home figures prominently on everyone's wishlist. However,while there may be a high demand for homes,not everyone is in the financial position to buy property without assistance. Here is where banks,financial institutions and housing financing companies come into the picture. Home loans are most often secured loans as the amount is genrally large. Borrowers have to offer up guarantees to the lender against the loan applied for. Different lenders offer different rates of interest,which means that the borrower needs to be aware of the interest rates prevailing in the market. However,obtaining a home is not an easy task,involving several steps than need to be completed in tandem. One of the most important tasks that need to be undertaken by home loan-seekers is the putting together of all the critical documentation. Failure to do so could result in the bank or lender not sanctioning a loan. To help you put things in order,here is a checklist of the documents you will need to have in place before your loan is sanctioned. COMMON REQUIREMENTS 1. Application form duly filled in 2. Documents for identity proof: Driving license,passport,PAN card,ration card,letter from a recognised public authority or public servant verifying your photograph,confirmation letter from your employer or another bank verifying your photograph 3. Address proof: Driving license,voters ID,passport,ration card,bank passbook or utility bills such as telephone,electricity,water and gas (less than two months old) 4. Proof of age: The above mentioned documents or school/ college leaving certificates can be provided for age proof. 5. Proof of income: a) Self-employed/ entrepreneurs: A brief introduction of business/ profession Balance sheet,profit and loss account statement of income,proof of income tax returns for the last three years certified by a chartered accountant Photographs for identity proof Receipts of advance tax payments if any made A photocopy of registration certificate of establishment under the Shops and Establishments Act/ Factories Act Registration certificate for deduction of profession tax Certificate of practice Receipts of bank loans Proof of investments (fixed deposit certificates,shares,or any other fixed asset) b. Salaried individuals Latest pay slip or Form 16 for proof of income Appointment letter Pay slip for the last two months along with salary account bank statement Certified letter from employer IT returns for three years Investment proof (fixed deposit certificates,shares,or any fixed asset) Documents supporting the financial background of the borrower to assertain his liability and assets,if any Photographs for identity proof WHEN BUYING FROM BUILDER 1. Original copy of the agreement between the buyer and the builder. The agreement must contain the liability of the builder to construct the building according to the plans and specifications approved by the local authority. It should also mention the possession date,price to be paid by the purchaser and the intervals at which the installments towards the full payment are to be made This document is of utmost importance. If the buyer has the original copy of the agreement,then the builder cannot sell the same property with another party unless the deal is cancelled. This is a breach. In cases,when the builder tries to dupe the buyers by selling one property twice,the agreement copy plays an important role. It also fixes the liability with regard to financing,defaults,settlement costs,actual possession,risk of loss and all of the terms and conditions that are expected of the parties must be included in the contract 2. Development agreement between the owner of land and the builder. It contains details regarding the terms and conditions on which the landowner has permitted development of his property. This document acquires great importance during a transaction for a property under construct. 3. Property titles. These show who the true owner of the property is. It shows whether the title is clear or the property is under litigation,and whether the land is freehold or leasehold. If its leasehold,the terms of the lease are important. It also helps you to know whether the seller has the authority to develop and sell the property and if it is free of encumbrances. If one buys a house and finds that the seller's title to the property is burdened with mortgages and unpaid taxes,it causes trouble to him as either he has to pay the unpaid amount or has to file legal cases on the seller to recover the money. Hence it is better if the title of the property is clear and marketable,that is,the seller should be the genuine and actual owner of the property. Also,the property should not be under any dispute or litigation. 4. Copy of order under the Urban Land Ceiling Act. 5. Property register card of the land under construction of 7/12 extract. This is a document issued by the concerned land authorities giving details such as the survey numbers,area and date from which the current owner is registered as the owner. 6. Index II extract of the agreement with the builder,which is issued by the office of the sub-registrar of assurances. It mainly mentions the names of the sellers and purchasers of a property for which the document is registered Index II and the 7/12 extracts would clearly specify the new owner. 7. Copy of permission for the land from the collector. If the land under consideration is agricultural and if one intends to develop the said land for residential/ commercial/ industrial use,then such agricultural land has to be converted to non-agricultural land and an Non Agriculture Order has to be obtained from the collector of the district where the property is located. Conversion of agricultural land into non-agricultural land without permission is punishable by law. The offender has to pay a penalty and may also have to demolish the unauthorised construction. 8. Search and title report (with the details of documents) for the last 30 years. It is mandatory for the developer to annex a copy of these reports in the Agreement for Sale with the intended purchaser of the flat. These documents would state whether the title to the property is clear,marketable and free from encumbrance. It states whether or not there is any existing mortgage litigation,condition or claim,which is likely to affect the title of the buyer adversely. 9. Copy of building plans sanctioned by the competent authority. 10. Commencement certificate granted by corporation or Nagar Palika. 11. Building completion certificate,which is issued by municipal authorities and shows whether the building complies with the rules of building height,distance from road,and whether it is built according to approved plans and is ready for habitation. The owner has to construct the building as per approved plans without any deviations and violations. Issuing of completion certificate will ensure that the owner has constructed the building as per the approved plan. 12. The latest receipts of taxes paid. 13. Partnership deed or memorandum of association of the builders firm 14. Personal guarantees,if applicable. 15. In case of alternate or additional security,documents for the same depending upon the security details. 16. Post dated cheques for the EMIs. WHEN BUYING FROM CO-OP SOCIETY Apart from the documents (except development agreement and property titles) required in case of buying from builder,the following documents are also needed while buying from co-operative society. 1. Original share certificate of the society. It needs to be issued by the society to the current owner and will be transferred to the owner's name when all the documents have been cleared. But one should also get a copy of this to ensure that the owner is indeed a member of the society 2. Allotment letter from the society in buyer's name. 3. Copy of the lease deed,if executed. 4. Certificate of the registration of the society. 5. Copy of the byelaws of the society. 6. No objection certificate from the society. If the flat is part of a registered society,it is important to obtain a no-objection certificate from society members. This helps identify if the member has any pending dues or disputes with the society and protects you from paying his past liabilities. WHEN BUILDING ON OWN LAND 1. Original sale deed of land and extract of Index II. 2. Property register card of 7/12 extract in your name. 3. Copy of permission for conversion of agricultural land from the collector,if applicable. 4. Search and title report (with the details of documents) for the last 30 years. 5. Copy of order under Urban Land Ceiling Act. 6. Copy of the building plans sanctioned by the competent authority. 7. Building permission granted by corporation or Nagar Palika. 8. The latest receipts of taxes paid. 9. Estimate of cost of construction certified by the architect. While the paper work may seem cumbersome,it is of utmost importance. Maintaining documents in proper order helps in times of litigation and disputes as buyers can thus protect themselves. Proper documentation helps secure loans as well as defend buyers from future complications. l
