List of Property Documents for Home Loans
There are several kinds of property documents required for a home loan, such as Sale Agreement, Encumbrance Certificate, Property Map, Allotment Letter from the Builder, NOC from Builder, MODT, Property Chain, Registration & Stamp Duty Receipt, etc. We are explaining each of them below so that you can understand the importance of these property documents.
Sale Agreement
This is one of the most important property documents for a home loan. Sale Agreement is a written agreement between a buyer and seller for the sale of the property. This will consist of all the details related to the sale of property between the buyer and the seller in the future. A Sale Agreement does not give you any right or interest in the property. Sales agreement consist of
- The Parties in the Agreement
- Property Location and its detailed Description
- Further Payment Schedule (if any)
- Specifications of the property to be developed
- Timeline for the construction
- Penalty Clauses in case of default by any of the parties
- Witness Signatures from both the parties
- Sale Deed
Some of the important details that Sale Deed consists of are mentioned below.
- Details of Both Parties (Buyers and Sellers), such as Name, Age, Addresses, etc.
- Detailed Description of the Property (Total Area, Surroundings, etc.)
- Sale amount including Advance Payment made by the buyer
- Mode of the Payment
- Time Frame within which the property title will be actually transferred to the buyer
- Actual Date of the Home Possession
- Full Authority of Buyer to Sell
- Extracts or Khata Certificate
At the time when you are buying a new property with the help of a Home Loan, the lender checks if you have a registration on the new property. For this sole purpose, lenders use Khata Certificate or Extract which is considered to be an important property document for a home loan. This document gives you proof that the property for which you are taking a home loan is properly registered in the local municipal records and all the construction has been done by the approved construction plan.
Memorandum for deposit of title deed
When you are going for a home loan, Memorandum for Deposit of Title Deed (MODT) is the property document that you would need. Well, this document is just an undertaking given by home loan borrowers that would state in writing that they have deposited the documents related to the property’s title with their respective lenders.
For home loans given by some lenders, borrowers also need to register this undertaking in addition to the loan agreement. You will need to pay some charges to register the property on your name. The Stamp Duty charges tend to change from one state to another state as per the guidelines.
After repaying your home loan amount, the lender will cancel the MODT and will issue a ‘Deed of Receipt’. Before this, you will have to collect the No Objection Certificate (NOC) from the bank and check if it has your name, property details, loan account number, etc.
Copy of Property Map
When you opt for a home loan, you need to have the property map. This map of your property should be approved by the respective statutory body to be verified by the lender. It will approve the fact that the construction of the property is legal and has been completed according to the rules and regulations fixed by the statutory body.
Allotment letter from the Builder
You will require an Allotment Letter from the Builder or Housing Society when you are taking a home loan to buy a property. The Allotment letter can be taken from the builder or housing society from where you are purchasing the property. This allotment letter will contain information like the description of the property sold or bought between the buyer and seller.
You also need to remember that an allotment letter can only be issued to the first owner by the Builder or Housing Society. Subsequent owners (owners after the first one) can get a copy of the original letter from the previous owner. Even if you are not taking a home loan, you will need this document to purchase the home you want.
General Power of Attorney
This document is required to know whether the previous sale or purchase of the home – for which you want a loan amount – was done by an authorized person on the behalf of the buyer or seller. This document is a legal instrument through which one individual gives another individual the power to act on his or her behalf as the legal representative to make all the financial decisions regarding the property, including the sale and purchase on behalf of the buyer or seller.
Construction Agreement Between Builder and First Owner
This is also an important property document that is basically a work contract between the Builder, who is building your home, and the First Owner. It is a written agreement related to the execution of the construction work, which also includes the transfer of goods involved in the execution of the contract. So, when a builder completes your construction work, it will transfer all the items and goods involved in the work along with the completed work to the first owner.
Encumbrance Certificate
This is one of the most crucial property documents that you will need at the time of a home loan. This document is to prove to the lender that the said property does not have any pending due or mortgages. Without submitting the encumbrance certificate, the lender will not provide you the loan as the credit risk will be high for them in a property that still has dues on it. The encumbrance certificate will have all the details related to transactions made on the property from its date of registration until now.
Possession Letter
At the time of getting a home loan, you will need to present the original copy of the Possession letter to the lender. This letter will indicate in writing that the possession of the property is being transferred to the purchaser on the date mentioned in the Possession letter.
Payment Receipts
When arranging the property documents for a home loan, you must remember to collect the Payment Receipts from the builder/developer if you are buying a new property. If you are not the first owner of the property and buying a resale property, you must ask for a copy of the original payment receipts issued by the builder to the first owner.
Latest Tax Receipts till the Date of Registration
Buying and selling a property can attract tax. That’s why you need to collect all the tax receipts from the previous owner so that you can know they have paid all the taxes on time and there is no due tax on the property you are purchasing.
NOC from the Builder or Housing Society
Known as the No Objection Certificate (NOC), you will need this document from your builder or Housing Society from where you are purchasing the home. It will ensure that there is no further objection from the builder or apartment association regarding your home.
Occupancy Certificate
Occupancy Certificate is also one of the significant property documents for a Home Loan that will verify that the construction has been completed. After this, an inspection is done again to verify whether the construction has been done according to the approved plan or not. An occupancy certificate will ensure that the property is ready for possession.
