FAQ For Self Employed Home Loan Applicants

November 25, 2020

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Factors to keep in mind while applying for and comparing housing loans?

These are the same as indicated for salaried employees, except for eligibility criteria.

Types of home loans available?
Same as described in section for salaried people.

Additional costs to consider apart from bank processing and other charges?

Registration charges, stamp duty, transfer fees are some other costs to consider.
Booking fees
Processing charges charged by lending institution on fixed basis or as percentage of loan amount.
Prepayment penalty if you plan to repay loan before the end of tenure and this can range up to 2% of the amount prepaid. RBI guidelines forbid prepayment charges on floating rate home loans.

Most details are same as for salaried applicants so refer that section for more details.

Can one include co-applicants in the home loan?

Yes, along the same lines as described in section for salaried people.

What is amortization schedule?

It is the same as described in section for salaried applicants.

EMI and Calculations?

Same as in section for salaried applicants.

Tenure of home loan?

Same as in section for salaried employees, up to 25 years maximum or 65 years age.

Tax rebates on home loans?

Rs. 1 lakh for principal, Rs. 1.5 lakh for interest with benefits under section 80C and section 24.

Home loan Norms for NRIs and tax benefits?

Same as described in previous section.

Does charge any service charges?

No.

Privacy and security of data submitted ?

Fully described in previous section for salaried applicants.

Process of application through ?

Same as described in section under salaried home applicants.

Documentation for self employed home loan applicants?

Identity proof (any one): valid passport, PAN card, Driving license, photograph, aadhar card, Defence/Govt ID card (with full name and date of birth)
Residence proof (any one): valid passport, aadhar card, bank statement/passbook copy less than 3 months old, telephone bill, electricity bill, gas bill, water bill, mobile bill (all less than 3 months old), Defence/govt ID card (with name and address), Residential certificate from Municipal Corporation, Letter from ward officer maintaining electoral rolls, FRRO certificate for expats,
Property purchase agreement less than 3 months old along with positive CPV
Signature verification (any one): valid passport, driving licence, PAN Card, PF Cheque clearance, Signature verification by bank
Relationship proof, in case there are co-applicants
Office address proof (any one): telephone bill, electricity bill, water bill, VAT certificate, Professional tax certificate, current account statement (less than 3 months old)
Existence proof (any one) in case office address proof is not available: shops & establishment certificate, VAT registration, factory registration, SEBI registration
Property approved map
Current sale deed with registration details and previous chain links relating to that property

In case self employed is proprietor:

Last 3 years ITR with computation of income
Last 3 years P&L and Balance sheet with schedules
List of debtors and creditors attested by CA and by self
Last 3 years tax audit reports with form 3CD if applicable
Provisional financials if applicable
VAT returns if applicable
Service tax returns if applicable
Last 6 months bank statement of current account/OD-CC account
Business profile on company letterhead
Address proof and proprietorship proof (2) : Shops & establishment certificate, VAT registration/Import-export registration/professional tax certificate/IT return/License issued by ICWA, ICSI, IMA, Food & Drug Control, ICAI, etc.
Letter from banker confirming proprietorship
Processing fee cheque

In case of partnerships:

In case of private limited company:

Details of rental income and rent agreement copy as well as rent credit in bank statement, ownership documents and balance transfer
Property documents: Latest foreclosure letter, statement of account and track record, last 6 months repayment account statement from bank