Property transaction is a document intensive affair because of complex legal, statutory and regulatory framework. Presentation and verification of documents is a very crucial step in the process of property purchase which also includes home loan. Unless, the borrower furnishes the entire set of required documents, home loan approval will be put on hold. Moreover, if the borrower wants to apply home loan for under construction property, then he has to go through a more rigid due diligence process. It has been observed that banks are little apprehensive on approving loan for under construction property in comparison to resale or launched properties. The bank requires thorough documentation of the under construction property stating property validity, completion dates, no objection certificate from the concerned departments, and the like.
Also, the borrower should bear in mind that he must tick of the below mentioned before applying for home loan.
- The stage of construction should be same as that of payment notice given to the borrower by the builder
- Borrower must physically recce the quality of construction including area, location, and adjoining areas
- Have a look at the project delivery track record of the builder
- Check whether the layout of flats and area of property is in concurrence to the area mentioned in the property papers
- The borrower must validate whether the builder has all the necessary certificates to construct at the stated site
- The borrower must do a valuation of the property and assess the market appreciation of the property in future
After a thorough check, if the borrower is satisfied with the builder’s record and aspects related to construction and property documents, he can apply home loan for the same. Here is a list of documents that you need to keep handy when you apply home loan for under Construction property:
- Detailed list of your KYC (Know Your Customer) and all documents to show your income proof
- No Objection Certificate (NOC) from the builder on their letter head
- Letter from builder / architect indicating the latest progress of construction
- Agreement with the builder duly stamped and registered
- Sale deed
- Khata certificate and khata extract
In the event where registration of the property in question is pending, then you must seek the following documents:
- True copy of agreement with builder
- Original ‘money receipt’ issued by Sub-Registrar
- Acknowledged copy on authority letter, addressed by applicant to Sub-Registrar
- Copy of the letter acknowledged by the builder
- Own Contribution Amount Proof.
Alongside seeking the above-mentioned documents, you may also enquire with the builder if the on-going project is approved by any bank. If yes, then you can acquire most of the verification documents from the bank itself. However, this should not compel the borrower to choose the same bank for home loan.
These documents are mandatory requirements by the bank when you apply home loan online for under construction property too. This makes the document proof round one of the main criteria for home loan eligibility. Hence, the borrower cannot skip this round of formality in any which way he chooses to apply for loan. Moreover, having these documents is an assurance for the borrower also because it entitles the property on his name. These documents can also come handy if any dispute arise in future regarding project completion or possession date, approvals from government bodies, terms and conditions of the sale and the like. So, as a borrower of home loan for under construction, you must be a little extra cautious while signing of the deal.
