Accommodation Times » Documentation http://www.accommodationtimes.com Total Newspaper on Real Estate Since 1986 Sat, 04 Feb 2012 09:30:16 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 Documentation – Application, Sanction and Disbursement http://www.accommodationtimes.com/housing-finance/documentation/documentation-application-sanction-and-disbursement/ http://www.accommodationtimes.com/housing-finance/documentation/documentation-application-sanction-and-disbursement/#comments Fri, 28 Aug 2009 09:54:18 +0000 admin http://www.accommodationtimes.com/?p=1684 Documentation – Application, Sanction and Disbursement
The documentation of all housing finance companies were, more or less, similar while aiming at common goal to establish credentials of the clients. For self employed and Business class the documents required were almost same except for few companies like Housing Development Finance Corporation, LIC Housing Finance Limited and Standard Charter Bank.
Common documents required by companies are :
i) Application form
ii) Applicant’s Photos
iii) Identity Proof
iv) Residential Proof
v) Educational Certificates
vi) Age proof
vii) Salary slips
viii) Form 16
ix) 6 months bank statement
x) Income Tax Returns
xi) 3 years audited P & L, Balance Sheet
xii) Property Documents
xiii) Business Profile
xiv) Credit Card Statements
Sanction Disbursement stage requires no additional documents except for Housing Development Finance Corporation (HDFC) , Citibank and LIC Housing Finance Limited. Normally the process of the stage requires property and security documents for most of the banks. Housing Development Finance Corporation requires mortgage deed of property, deposit of legal title of the property, property documents with all mother documents and interim security if property is under constructions.
Sundaram Home Finance Limited requires property documents along with copy of approved plan. Although the company’s presence in Mumbai is negligible, the company has good credit policy to protect its interest in long run.
LIC Housing Finance Limited insist upon copy of agreement for sale, copy of registration receipt, copies of receipts of payment to the seller and No Objection Certificate (NOC) from Builder or Society. The company also requires, if the seller is Cooperative Housing Society : allotment letter, original share certificate, society registration certificate, copy of sale / lease deed in favour of society and No Objection Certificate (NOC) of the society besides land conveyance and Occupational Certificate issued by Mumbai Municipal Corporation.
It requires, if seller is public agency, direct allotment in Cooperative Housing Society by Public Agency : Allotment letter, Original Share Certificate, Society registration certificate, lease agreement, public agency’s approved list of members for the society, No Objection Certificate from society, No Objection Certificate (NOC) from agency. The resale transactions requires to furnish all previous registered documents, agreement for sale duly stamped and registered, No Objection Certificate (NOC) from society and original share certificate.
To have a detailed view of the documentation, LIC Housing Finance Limited and Citibank are best examples to look into.
LIC Housing Finance Limited :
For salaried profile, salary slips of government employees and repeated organisation are readily accepted. In the case of private Limited and unknown companies, it was found that salary slips were cooked up and also the income tax return copy was manipulated while photocopying. Hence, it is a practice to have income tax return copies verified with the income tax department in respect of salaried individuals of unknown companies. A dim view is taken in case there is and excessive depreciation content in the Profit and Loss account. A standard set of minimum documents is required with the application ; these are for proof of income, proof of identity and title to the property. In the case of government employees, documentation is reduced due to competition. For construction loans, verification of title is followed by scrutiny of various municipal consents on aspects such as Urban Land Ceiling and Regulation Act, zoning (Coastal Regulation Zone/ No Development), Transfer of Development Rights (TDR) and any encumbrances. Reputed builders take a pre-sanction from LIC Housing Finance Limited on clearance from various agencies. The legal department is out-sourced. This department mainly looks at possession, encumbrances and restriction on usage of land. In the case of resale the life of the constructed building and outstanding dues of the previous owners is verified. In the case of purchase from builders, a pre sanction obviates the need for repeated title verification. No loans are given for purchase of plots. In the case of home extension loans, municipal consents are verified. In the case of home improvement loans there is scheme called Gruh Sudhar, here the interest rates are slightly higher as the end use cannot be controlled. There is now no restrictions on the number of loans that individuals can take. Every new loan is treated as separated account.
Citibank :
The basic documentation for applications are three months salary slips, Form 16 and in the case of non salaried applications it is three years financial statements and Income Tax Returns. In the case of weak proposals, extra documentation may be insisted upon. The bank has devised its own checklist for credits appraisal of self employed and business persons. In the case of business profile the depreciation and bottom line are ignored and substituted by a gross margin percentage on the total income ( i.e. 30% of the total income) to access the eligibility. Installment to income ratio 60% in the case of salaried individuals and 50% in the case of others. Loan to value is set at 85%.
Many banks calculate income ratio to expenditure for assessing the capability to pay back the loans.24
The Citi bank also insist upon Memorandum of Association if loan request is from Indian registered company. For Public Sector Undertaking and government employee additional documents includes two year’s Form 16 and payslip. If non continuation in the employment, appointment letter within 15 days must be produced. Signature verification from bank, bank statement of self and of the firm, if self employed, copy of Over Draft account statement, statement of car loan if any and five client’s address if self employed, are additional documents required by the bank.
No Objection Certificate from co-operative housing society is another big problem. Society do not co-operate with the member borrower. Sometime No Objection Certificate format from Housing Finance Companies are very objectionable. The draft of No Objection Certificate gives power to Housing Finance Companies to mortgage entire plot of land on which the society’s building stand.

Documents required to be submitted at the time of application :
Basic Requirement to avail a home loan
Owing a home is perhaps the biggest and most important dream of an average family therefore ownership of a home goes beyond pure financial considerations. Home loans has witnessed an increase owing to competition between a number of public and private players.
Basic qualifications for a home loan (Resident Indian)
A resident Indian is eligible for a home loan if he satisfies the following conditions:
i) He / she must be earning a regular monthly income.
ii) If he / she is from the salaried class, then he should a minimum of 5 years of service left.
iii) If he / she is a business person or a professional or a self employed individual, then his / her age should be less than 58 years at the time of applying for the loan.
iv) The property that he wishes to purchase/construct should have a clear and marketable title.
There are certain sets of documents that need to be submitted at the time of application. The documents sets will vary according to individual status- either resident or non-resident in India, as also the type of loan that an individual may want to avail of.

Resident Indian
Salaried Individual
i) Salary slip/Form 16A.
ii) A photocopy of the first and last pages of ration card or copy of Permanent Account Number /telephone/ electricity bills.
iii) A photocopy of Investments (Fixed Deposit certificates, Shares, any fixed asset, etc) or any other documents supporting the financial background of the borrower.
iv) A photocopy of Life Insurance policies with the latest premium payment receipts (if any).
v) Photographs (as applicable).
vi) A photocopy of bank statement for the last six months.

Self employed or businessman.
i) A brief introduction of business/profession.
ii) Balance sheet, profit & loss account and statement of income with Income Tax returns for the last 3 years certified by the Chartered Accountant.
iii) A photocopy of advance tax payments (if applicable)
iv) A photocopy of registration certificate of establishment under shops and establishments Act/ factories Act.
v) A photocopy of registration certificate for deduction of profession tax (if Applicable).
vi) Bank statements of current and saving accounts for the last six months.
vii) A photocopy of certificate of practice (if applicable).
viii) A photocopy of any bank loan (if applicable).
ix) A photocopy of the first and last pages of the Ration card or a copy of Permanent Account Number / telephone/electricity bills.
x) A photocopy of investments (Fixed Deposit certificates, shares, any other fixed assets).

If flat is purchased from builder
i) Original copy of the agreement with the builder.
ii) 7/12 extract of the agreement with the builder.
iii) Copy of Non Agriculture permission for the land from the collector.
iv) Search and title report (with the details of the documents) for the last 30 years .
v) Development agreement between the owner of land and the builder.
vi) Copy of the order under the urban land ceiling Act.
vi) Copy of building plans sanctioned by the competent authority .
vii) Commencement certificate granted by the corporation/Nagar Palika.
viii) Building completion certificate (if available).
ix) The latest receipts of taxes paid .
x) Partnership deed or memorandum of association of the builder firm.

If the property is being purchased in a co-operative society
i) Original share certificate of the society.
ii) Allotment letter from the society in your name.
iii) Copy of the lease deed, if executed .
iv) Certificate of the registration of the society.
v) Copy of the bye-laws of the society.
vi) No objection certificate from the society.
vii) 7/12 extract or property register card in the society’s name .
viii) Copy of Non Agricultural permission for the land from the collector.
ix) Search and title report (with the details of documents) for the last 30 years.
x) Copy of order under the Urban Land Ceiling Act.
xi) Copy of the building plans sanctioned by the competent authority.
xii) Commencement certificate granted by the corporation/Nagar Palika.
xiii) The latest receipts of tax paid.
xiv) Original Agreement to assign/ Deed of assignment.

If constructing on own land
i) Original sale deed of land and extract of index 2.
ii) 7/12 extract or property register card in your name.
iii) Copy of Non Agricultural permission for land from the collector.
iv) Search and title report (with the details of documents) for the last 30 years.
v) Copy of order under urban land ceiling Act.
vi) Copy of the building plans sanctioned by the competent authority.
vii) Building permission granted by corporation / Nagar Palika.
viii) The latest receipts of taxes paid.
ix) Estimate of cost of construction certified by the architect.

Non-residents
Income Documents
i) Employment contract (if the contract is in any language other than English, the same has to be translated into English and attested by the employer/Indian Embassy).
ii) Certified copy of the latest salary slips of the past 6 months.
iii) Identity card issued from the current employer.
iv) Continuous discharge certificate, if applicable.
v) Latest work permit.
vi) Visa stamped on passport.
vii) NRE bank account passbook sheets .
viii) Overseas bank account statements for the past 6 months.
ix) Bio-data covering educational qualifications, age job experience, nature of profession/ business with necessary proof.
x) Power of Attorney in favour of local representative in India, if required Guarantor forms along with net worth proof / income proof. Number of guarantors as per the norms of the company. The guarantorsc should be related to the applicant(s).

Property documents: purchase of a flat from the builder/promoter.
i) Title deeds of the builder/land owner for a period of at least 13 years.
ii) Development agreement between the builder and land owner if applicable.
iii) Power of attorney executed in favour of the builder, if applicable.
iv) Non-encumbrance certificate for the past 13 years
v) The khata certificate (basic document indicating ownership of property as entered in the register of the government authorities).
vi) Up-to-date tax paid receipts of the property.
vii) A sanctioned plan and Licence.
viii) An agreement for sale and a construction agreement with the borrower.

In case of purchase of house from second owner
i) Title deeds of land owner for a period of at least 13 years.
ii) Non-encumbrance certificate for the past 13 years.
iii) Khata certificate.
iv) Up to date tax paid receipts of the property .
v) Sanctioned plan and license.
vi) Agreement for sale in favour of the applicant(s).
vii) Valuation report from the qualified valuers

Incase of repairs/ renovation/ extension of house/ flat.
i) Title deeds of land owner for a period of at least 13 years.
ii) Non-encumbrance certificate for the past 13 years.
iii) Khata certificate.
iv) Up to date of tax paid receipts of the property.
v) Sanctioned plan and license for the extension.
vi) Agreement for sale in favour of the applicant(s).
vii) Estimates of costs from the qualified engineer.

Personal Documents.
i) 1 passport size photograph.
ii) 1 copy of your passport/ PAN card/ Driving License/school leaving certificate/ birth certificate/ LIC policy/ bankers sign verification.
iii) 1 copy of last months telephone bill / ration card (first and last page) / title deed property/rental agreement/driving license.

]]> http://www.accommodationtimes.com/housing-finance/documentation/documentation-application-sanction-and-disbursement/feed/ 0 Documentation of Individual housing finance http://www.accommodationtimes.com/housing-finance/documentation/documentation-of-individual-housing-finance-2/ http://www.accommodationtimes.com/housing-finance/documentation/documentation-of-individual-housing-finance-2/#comments Mon, 24 Aug 2009 12:10:28 +0000 admin http://www.accommodationtimes.com/?p=1640 Documentation of Individual housing finance

Owing a home is perhaps the biggest and most important dream of an average family therefore ownership of a home goes beyond pure financial considerations. Home loans purchase has witnessed an increase owing to competition between a number of public and private players. The cut in the loan interest rate has also fuelled the demand for this product.

Basic qualifications for a home loan (Resident Indian)
A resident Indian is eligible for a home loan if he satisfies the following conditions:
He must be earning a regular monthly income.
If he is from the salaried class, then he should a minimum of 5 years of service left.
If he is a business person or a professional or a self employed individual, then his age should be less than 58 years at the time of applying for the loan.
The property that he wishes to purchase/construct should have a clear and marketable title.

Documents required to be submitted at the time of application
There are certain sets of documents that need to be submitted at the time of application. The documents sets will vary according to individual status- either resident or non-resident in India, as also the type of loan that an individual may want to avail of.
(A) 1. Resident Indian
1.(a) Salaried Individual
Salary slip/Form 16A
A photocopy of the first and last pages of ration card or copy of PAN /telephone/ electricity bills.
A photocopy of Investments (FD certificates, Shares, any fixed asset, etc) or any other documents supporting the financial background of the borrower
A photocopy of LIC policies with the latest premium payment receipts (if any)
Photographs (as applicable)
A photocopy of bank statement for the last six months.
(b) Self employed or businessman
A brief introduction of business/profession
Balance sheet, profit & loss account and statement of income with Income Tax returns for the last 3 years certified by the Chartered Accountant
A photocopy of advance tax payments (if applicable)
A photocopy of registration certificate of establishment under shops and establishments Act/factories Act
A photocopy of registration certificate for deduction of profession tax (if Applicable)
Bank statements of current and saving accounts for the last six months
A photocopy of certificate of practice (if applicable)
A photocopy of any bank loan (if applicable)
A photocopy of the first and last pages of the Ration card or a copy of PAN/telephone/electricity bils
A photocopy of investments (FD certificates, shares, any other fixed assets)
( C ) If flat is purchased from builder
Original copy of your agreement with the builder
7/12 extract of your agreement with the builder
Copy of N.A. permission for the land from the collector
Search and title report (with the details of the documents) for the last 30 years
Development agreement between the owner of land and the builder
Copy of the order under the urban land ceiling Act
Copy of building plans sanctioned by the competent authority
Commencement certificate granted by the corporation / Nagar Palika
Building completion certificate (if available)
The latest receipts of taxes paid
Partnership deed or memorandum of association of the builder firm
(d) If the property is being purchased in a co-operative society
Original share certificate of the society
Allotment letter from the society in your name
Copy of the lease deed, if executed
Certificate of the registration of the society
Copy of the bye-laws of the society
No objection certificate from the society
7/12 extract or property register card in the society’s name
Copy of N.A permission for the land from the collector
Search and title report (with the details of documents) for the last 30 years
Copy of order under the urban land ceiling Act
Copy of the building plans sanctioned by the competent authority
Commencement certificate granted by the corporation / Nagar Palika
The latest receipts of tax paid
Original Agreement to assign/ Deed of assignment
(e) If constructing on own land
Original sale deed of land and extract of index 2
7/12 extract or property register card in your name
Copy of N.A permission for land from the collector
Search and title report (with the details of documents) for the last 30 years
Copt of order under urban land ceiling Act
Copy of the building plans sanctioned by the competent authority
Building permission granted by corporation / Nagar Palika
The latest receipts of taxes paid
Estimate of cost of construction certified by the architect

Non-residents
(a) Income Documents
Employment contract (if the contract is in any language other than English, the same has to be translated into English and arrested by the employer/Indian Embassy)
Certified copy of the latest salary slips of the past 6 months
Identity card issued from the current employer
Continuous discharge certificate, if applicable
Latest work permit
Visa stamped on passport
NRE bank account passbook sheets
Overseas bank account statements for the past 6 months
Bio-data covering educational qualifications, age job experience, nature of profession/ business with necessary proof
Power of attorney in favour of local representative in India, if required Guarantor forms along with net worth proof / income proof. Number of guarantors as per the norms of the company. The guarantors should be related to the applicant(s)
(b) Property documents: purchase of a flat from the builder/promoter
Title deeds of the builder/land owner for a period of at least 13 years
Development agreement between the builder and land owner if applicable
Power of attorney executed in favour of the builder, if applicable
Non-encumbrance certificate for the past 13 years
The khata certificate (basic document indicating ownership of property as entered in the register of the government authorities)
Up-to-date tax paid receipts of the property
A sanctioned plan and Licence
An agreement for sale and a construction agreement with the borrower

2.( C) In case of purchase of house from second owner
Title deeds of land owner for a period of at least 13 years
Non-encumbrance certificate for the past 13 years
Khata certificate
Up to date tax paid receipts of the property
Sanctioned plan and license
Agreement for sale in favour of the applicant(s)
Valuation report from the qualified valuers
2.(d) Incase of repairs/ renovation/ extension of house/ flat
Title deeds of land owner for a period of at least 13 years
Non-encumbrance certificate for the past 13 years
Khata certificate
Up to date of tax paid receipts of the property
Sanctioned plan and license for the extension
Agreement for sale in favour of the applicant(s)
Estimates of costs from the qualified engineer
2.(e) Personal Documents
1 passport size photograph
1 copy of your passport/ PAN card/ Driving License/ school leaving certificate/ birth certificate/ LIC policy/ bankers sign verification
1 copy of last months telephone bill / ration card (first and last page) / title deed property / rental agreement / driving license

Loan amount eligibility
The maximum amount that a resident Indian can borrow from housing finance companies is 75% – 85% of the project cost. Subject to this condition, the borrowers repayment capacity takes into consideration factors such as income, age, qualifications, number of dependants, spouse’s income, assets, liabilities, stability and continuity of occupation and saving history. Loans beyond the above mentioned limits can be considered by the housing finance companies depending on the merits of the case.

Documents required to be submitted after sanction
Apart from the various documents to be submitted at the time of application of loan, there are further documents to be given to the housing finance company once the loan is sanctioned.
Tri-partite agreement between the borrower, builder and housing finance company
Proof of investment of margin money
Loan papers by the applicants
Guarantee agreements with sureties
Post dated Cheques
Original documents executed with the builder or previous owner
No objection certificate from the builder to mortgage the property in favour of the housing finance company
No objection certificate from other housing finance companies if the builder has availed a project loan
No objection certificate from the co-operative housing society
Share certificate of housing society

Steps to avail a home loan
A person applying for a home loan has to go through various steps, before the loan is actually disbursed to him. We list below in brief, the various steps in a loan application.
Inquiry stage: Here a person from the housing finance company will explain the types of loan available, the interest rates, the amount of loan eligible by the customer and the amount of installment payable and the requirements of the loan.
Submission of loan application form: The loan application form asks for information regarding the borrower, his family, his income and expenditure details, his assets, liabilities, cost of the property intended to be purchased, availability of resources, details of personal finances including bank account numbers, details of property to be developed or purchased, amount of loan required etc. the applicable processing fee is also to be paid while submitting your application form. All documents asked for in the list of documents are to be submitted along with application form.
Legal scrutiny report: The documents pertaining to the property are then srcutinised by legal personal. It is very important that the property under consideration for purchase or mortgage has proper and marketable title.
Pre-sanction inspection of the property: On receipt of the application for loan, an officer from the housing finance company will conduct an inspection of the property proposed to be bought to ascertain the location of the property, verify the technical details of the house like structural stability etc. and stage of construction if the loan is for construction.
Credit appraisal: The loan officer will then process the application considering the monthly income of the applications, number of the dependants, monthly expenditure, repayment capacity, employment history, number of years of service left over and other such particulars that affect the credit rating of the borrower. The loan officer for the approval of the loan then verifies proof of the monthly income and other relevant particulars. Some information from employers, bankers, etc may also be called for.
Sanction letter: On the approval of the loan, a sanction letter communicating ther sanction terms and conditions is issued to the borrower.
Acceptance letter: The applicant will then, on reading the terms of the loan must communicate his willingness to accept the loan by the way of an acceptance letter within one month from the date of sanction letter also pay the requisite administrative fee.
Inspection of property: Post sanction inspection of the property is done at each stage of disbursement to ensure that the borrower invests the margin money and the progress of work is as per schedule.
Investment of margin money: The margin money being the difference between the cost of the property and the loan amount sanctioned to the borrower has to be invested by the borrower on the property prior to release of the loan amount incase of a construction of a house.
Submission of documents and signing of loan papers: The original documents to be submitted by the borrower pertaining to the property as enumerated in the legal scrutiny report are then submitted. The loan papers to be signed by the borrowers and the guarantors will be kept ready by the branch. On the appointed day the loan papers is to be signed by the borrowers and the guarantors.
Release of the loan amount: Depending on the purpose of the loan, the disbursement will be made either in stages, if it happens to be for construction or in full on the day of registration if it is for purchase of a house.
Submission of post-dated cheques for payments of installments: The repayment of the loan, which is also very important aspect from the point of view of the borrower as well as the financier, is to be arranged by the borrower as per the terms specified, either through salary deduction or through post-dated Cheques.

Annexure – 1: Comparison of documentation required by various HFCs
HDFC SBI ICICI LIC Kotak Sundaram Bank BHW Birla Thane
Housing Mahindra Housing of Home Janata Finance Bank Finance Baroda Finance Sahakari
Bank
Application form with photographs
Identity and resident proof
Latest salary slip/ Form 16 (of salaried individual)
Last 6 months banks statements (local bank account)
Last 3 years Income Tax
Returns documents in the case of businessmen /self-employed
Proof of business existence and write up
Last 3 years final accounts
Documents in case of non-residents
Photocopy of employment or labour contract
Latest salary certificate
2 local contacts with employment details, etc.
power of attorney in favour of local representative
Identity card / labour card
Overseas bank account statements
Photocopy of passport and visa
Property documents
Sale deed
Agreement of sale
Letter of allotment
Non-encumbrance certificate
Copy of approved plan and approval from local body
NOC from society / builder
Latest tax paid receipts from builder / society
Search and title report

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