By Amber Kevin
During a financial emergency, applying for a mortgage loan is an excellent way to get the desired liquid cash. But, to qualify for the loan, you must submit certain documents. Read on to know more about it.
At times when the finances are strained, and you need immediate cash, to tide over, rather than fretting about the situation, you can leverage your asset to your advantage. When the cash flow is restricted, applying for a mortgage loan or loan against property can be a handy option. Since the mortgage is a secured loan, the interest rate for such a loan is much lower than a personal loan. Also, you can get a higher amount as compared to that of an unsecured loan, and for a higher tenure so that the repayment is easy.
Today, several lenders in India offer mortgage loan. In a mortgage loan, you must pledge your asset as a security against the amount you borrow. The asset can be anything, be it residential property, a piece of land, or commercial property. The lenders assess the value of the property pledge and sanction about 50% of the value of the property. Some lenders even offer loan up to 60% of the property value for specific customers who have an existing relationship with them.
One of the significant benefits of applying for a mortgage loan, apart from getting a higher amount and more extended repayment period is that you can use the amount for any purpose you want. The lenders do not restrict the purpose for which the amount can be used; you can use the funds to expand your business, meet personal expenses like child’s wedding or education fees, purchase a piece of machinery, home innovation, etc.
While you may find several lenders willing to offer you a mortgage loan, they have strict eligibility requirements and would require you to submit certain documents to qualify for the loan. While the documentation requirement may vary from lender to lender, most financial institutions have the following criteria.
Documents required for salaried employees:
Proof of identity (you can submit any one of the following documents)
- PAN card
- Driving license
- Voter ID
- Bank Passbook with a photograph
- Passport
- Any identity card issued by a state or central government organisation
Proof of residence (you can submit any one of the following documents)
- Passport
- Landline telephone bill, electricity bill (not more than three months old)
- Bank passbook
- Voter’s ID
- Letter from any authorised government authority
- Maintenance bill
Income-related documents (You must submit the following documents)
- Salary Slip of the last three months
- Bank account statement or bank passbook for the last six months, which shows salary credit
- Latest Form-16 and IT returns.
Documents related to the property you wish to purchase (you must submit the following documents)
- Approved construction plan of the building (it must be secured from the builder)
- Proof of no encumbrances on the property
- The title deed of the property including the chain of previous
Other Documents
Apart from the above documents, as a salaried employee, you must also furnish the following documents to be eligible for a mortgage loan:
- Employment experience letter. If you are employed for less than one year in your current organisation, you must submit a copy of the appointment letter issued by the employer.
- Bank account statement of last six months showcasing repayment of any loan repayments
- Passport-sized photograph of all applicants (if you are applying for a joint loan) affixed on the application form and duly signed by the member/s across
- A cheque issued in favour of the lender for the payment of processing fee
- A declaration letter stating the purpose of the loan
Documents required for salaried employees:
If you are a salaried employee, the documents required to showcase your proof residence and proof of identification is the same as for a salaried employee (see above).
Income-related documents (You must submit the following documents)
- Proof of income tax returns along with the calculation of income for the last three assessment years (for both individual and the business organisation). An authorised charted accountant must duly attest the documents
- Copy of the balance sheet and the profit and loss account statement for the last three years. Also, you must furbish annexures/schedules of both the individual and business organisation attested by the charted accountant
- Copy of current account statement for last six months and copy of the savings account of the individual
Other Documents
- Details of shareholders and directors’ names along with their individual shareholding certified by a CS or a CA
- Memorandum and Articles of Association of the Company
- Partnership deed (in case of a partnership firm)
- Details of any current outstanding loan of the individual and the business organisation
- Form 26 AS
Now that you are aware of the documents required to apply for a mortgage loan make sure that you keep the documents handy before you approach the lender to avoid any delay in the approval process.
When a person is unable to keep up with the monthly payments on their house, they may opt for Chapter 13 bankruptcy and apply for a loan modification. Hiring an attorney can help you prepare a strong case to make sure your application gets approved by the judge. Click on the link to learn more https://www.roemermanlaw.com/mortgage-loan-modifications/
