• The bank sanctions home loans on the basis of repaying capacity of the borrower subject to maximum limit on the value of property as determined by RBI from time to time.
• The green signal for the loan is given once a bank is confident of the borrowers ability to repay the sum. The criteria for deciding the home loan are primarily the cash flow and expenses of borrower. In case of co-owners, they must necessarily be co-applicants for applying home loan.
• Age is also an important criterion for deciding the tenure of the loan. Younger the borrower is, the tenure may be longer which can help in lower EMI.
• Salary structure is also an important factor. Lenders don’t take into account the allowances the borrower gets as part of the salary even though the amount is a part of your Cost to Company (CTC) package. If the salary is packed with perks and allowances, borrower loan eligibility might come down. Other incomes like bonus and performance linked pay may also not be considered by the banks if there is no confirmation of regularity.
• However, one can increase the borrowing capacity by roping in a co-borrower. Banks feel safer if co-borrower is a life partner.
• Self employed professionals and businessman may save a neat sum if their bank allows to link their home loan to a current account with lender.
• Following fees and charges of a home loan must be considered:
  Before disbursal:
  1. Processing fees
  2. Legal and Technical charges
  3. Stamp Duty
  4. Top up Charges
  
  After disbursal:
  1. Pre payment charges
  2. Duplicate statement charges
  3. Late payment charges
  4. bounced cheque charges

Following is the list of documents to avail the home loan:

Proof of individual's identity (any one of the following)

1. Passport
2. PAN card
3. Defence identity card
4. Voter's identity card
5. Driving licence
6. Photo ration card
7. Government identity card

Proof of residence (any one of the following)

1. Passport
2. Ration card
3. Telephone bill
4. Electricity bill
5. Driving licence
6. Society outgoing bill
7. Voter's identity card
8. Life Insurance Policy

Only Passport can be used as both Proof of individual's identity and Proof of residence.

Proof of age (any one of the following)

1. Passport
2. Valid driving licence
3. Voter's identity card
4. Birth certificate
5. School leaving certificate
6. LIC Policy or Premium receipt clearly indicating the applicant's age

Financial documents

Salaried individuals

1. Latest salary slip showing statutory deductions AND
2. Form 16 (Declaration from the employer giving the details of income and deductions, duly signed by an authorised signatory of the Company) OR Latest acknowledged IT returns AND
3. Bank statements for the last 3 months

Self-employed individuals / Proprietor

1. Computation of income + P&L for the last 2 years certified by a C.A. OR P&L and Balance sheet for the last 2 years certified by a C.A. AND
2. Copies of acknowledged IT returns for the last 2 years AND
3. Bank statements for the last 6 months

Partnerships (Loans will be extended in favor of partners)

1. Computation of income + P&L for the last 2 years certified by a C.A. OR P&L and balance sheet for the last 2 years certified by a C.A. AND
2. Copies of acknowledged IT returns for the last 2 years AND
3. Bank statements for the last 6 months AND
4. Partnership deed, letter of authority, Proof of office

Private Limited Companies (Loans will be extended in favor of Directors)

1. Computation of income + P&L for the last 2 years certified by a C.A. OR P&L and Balance sheet for the last 2 years certified by a C.A. AND
2. Copies of acknowledged IT returns for the last 2 years
3. Bank statements for the last 6 months
4. Memorandum and Articles of Association
5. Board resolution
6. Authority letter from all directors to accompany the application form with photographs of authorized signatories if not specified in the board resolution
7. Proof of office