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leads us to render a hassle-free wholesome buying experience. Sharing our collective insight into procedural
formalities to ease the effort of procuring your dream home.

Documentation

Documents that should be verified before
buying a residential unit

  • Ownership Documents of the Land Owner/Promoter including title certificate.
  • Development Agreement, if the Developer/Promoter is not the owner and has acquired the development rights.
  • Building Plan Approval / Commencement Certificate / RERA Registered / Environmental Clearance approved by the competent authority.
  • Other permissions issued by the competent authority depending on the nature of plot/type of development by local body.
  • If the construction is completed then the Completion Certificate issued by the competent authority.
  • Draft of Agreement for Sale and brochure for specifications, layout and amenities in the flat/complex/layout.
How to Buy Home in Chennai

Documents required from the Builder

  • Sales Deed: The sales deed is proof of the sale of the property to the buyer.
  • Building Approval Plan: This is issued by the relevant municipal body if the building approval complies with the existing requirements.
  • Commencement Certificate: For a property still under construction, the local body will issue a commencement certificate if it meets their criteria.
  • Encumbrance Certificate: An Encumbrance Certificate documents all the transactions carried out against the property.
  • Completion Certificate: For a completed property, the municipal bodies will issue this certificate if it meets their criteria.
  • Occupancy Certificate: This is also issued by municipal authorities after inspecting the construction quality of the project and checking if it meets their safety standards.
  • NOC: A No Objection Certificate is issued by all the local bodies concerned if they determine that a property does not violate any requirements.
  • Allotment Letter: This letter is issued by the builder and provides details about the project and acknowledges the amount already paid by the buyer.
How to Buy Home in Chennai

Home Loan Process

A home loan can cover only 80% of the total property value; the remaining 20% needs to come from
your personal funds. For those not familiar with it, applying for a home loan and understanding the amount payable as first
time home buyer down payment can seem tedious. However, once you understand the process, you can
prepare for it and learn how to purchase your first home with zero hassles.

Here’s a new home buyer’s guide to all the steps involved in the loan
application process.

Fill out an Application

Once you decide on a bank to take out a loan with, you can download the home loan application form from their website or collect it in person. This form usually includes your personal and financial details. You will also need to attach specified documents as proof of the information you have provided. To understand the exact procedure involved, the websites of these institutions are an important source of first time home buyer information.

Evaluation of Your Credentials

Banks are always undertaking a risk when they give out loans because there is a chance that you might not pay them back. This is why they conduct a thorough background check to verify your details and assess your repayment capacity. Most times, the bank will send a representative to your home or office and evaluate your documents.

Assessment of Credit History

Banks use a number of parameters to judge the repayment capacity of an individual. Younger applicants usually get preference as they have a greater number of working years left to repay the loan. It also helps if you work with a reputable and well-known organisation. For self-employed individuals, a financial statement of your business will tell banks how stable your income is.

One of the most important factors taken into consideration by banks is your CIBIL score. If your CIBIL score is below 750, you should take measures to increase it before applying for a loan.

Inspection of Property
  • Banks will send their representative to visit the property and check whether it is a good investment. Some of the details they look out for include:
  • Whether the stage of completion matches the details provided by you
  • The pace at which construction is taking place
  • Whether the layout and facilities provided comply with standards specified by development authorities
  • Value of the property in comparison with price trends of surrounding properties
  • Construction quality
Signing of the Agreement

After the bank has verified your personal and property details, they will sanction your loan. The draft of the agreement will be approved by a lawyer and then has to be signed by you. You will also need to hand over the original property documents to the bank who will keep it with them as security until you have repaid the entire loan amount. When you receive the cheque for the entire loan amount, it will usually be made out to the builder and not to you personally.

Documents required for availing a home loan
  • Proof of Income: a) Salaried Applicant minimum 4 months’ salary slip along with 2 years form 16. b) Self Employed, Professionals 3 years ITR with Profit and Loss, Balance Sheet and all the Annexures(if any)
  • Business profile with details on the nature of business, list of clients, suppliers, staff strength, geographical spread, etc.
  • Age proof: PAN card, Voters ID, Passport, or License
  • Copy of ration card or company ID card
  • Updated bank passbook or a copy of the statement of accounts for the last 6 months for salaried and 1 Year for Self Employed/Professionals.
  • Copy of educational qualifications certificate/s and proof of business existence like Shop Act Registration copy, GST/TAN registration
  • Certificate in original from employer for any other allowances which are not reflected in salary slip
  • Passport size photographs of applicant and co-applicant
  • Cheque for processing fees
  • You may be asked to submit further legal documents if required by the bank, or its approved lawyers.

Retain photocopies of all the documents being submitted by you.

How to Buy Home in Chennai

Tax Benefits

How to Buy Home in Chennai

Income Tax
certificate

Every bank issues an Income Tax Certificate that serves as requisite proof to let you avail of tax benefits that accrue on repayment of a home loan. This will typically contain the total amount of interest and capital repaid during the Year. The Income Tax Certificate is mandatory to claim the tax benefit in respect of self-occupied property. You will have to file it with your tax returns and submit this to your employer or Chartered Accountant to calculate your tax liability.

How to Buy Home in Chennai

Deduction
on Interest

The repayment of the interest portion of the EMI is allowed as a deduction under section 24 if the purchase or construction is completed within a period of three years from the end of the year in which the loan is taken under the head "income from house property" up to Rs. 2,00,000/- for self- occupied property and full amount of interest in case of let-out property provided that loss from such let out house property does not exceed Rs.2 Lakhs.

How to Buy Home in Chennai

Deduction
on Principal Repayment

The repayment of principal amount of the loan can be claimed as a deduction under section 80C up to a maximum amount of Rs. 1.5 Lakhs. You can also claim deduction under Section 80C towards payment made for stamp duty, registration fee and other expenses for the purpose of transferring the property in the name of the assessed. All these deductions however should not exceed the overall limit of Rs. 1.5 Lakhs.

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