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Home loans are for everyone – whether you have a salary or you are self-employed

Home loan is for everyone

Owning a house is a dream for most people. There is normally a mind-block that it is only possible to get a home loan if you are salaried. That is not true. SBI gives loans to both salaried and to self-employed.

The one thing you would require is proper documents and evidence of income through proper documents and bank audit trail.

It is a myth that the SBI home loan eligibility based on salary is the only thing available. SBI also has sufficient choice in term of Self-employed home loans, as long as the papers are in place and income documents can be furnished by the borrower.

Basic conditions to fulfil for home loan eligibility

The home loans are given by SBI to salaried individuals, self-employed professionals (CA, doctors, architects), and also to self-employed businessmen. For salaried persons, one of the key requirements is having a permanent job with regular income. The salary slip, appointment/promotion letter and Form 16 are the key documents.

For professionals in practice, it must be audited statement of accounts coupled with latest copies of their filed tax returns, acknowledged by the Income Tax Department. Home loans are normally given by banks to individuals in the age group of 24 years to 60 years. If you meet the above conditions, you need to have healthy earnings, ability to service the loan EMI, good credit track record and the necessary paper records and bank audit trail to prove income flows.

Are you salaried? – be ready with these documents

In case you are a salaried person, here are the documents that you need to submit for the home loan process.

  • Stamped salary slips issued by the company for the last 3 months or 6 months
  • Copy of the increment letter if salary has recently increased and not reflecting in salary slips
  • Bank statements for last 6 months where the salary credit is received on a monthly basis and must tally with the salary slip
  • Copy of Form 16 issued by the Income Tax Department of last 3 years
  • Copy of Form acknowledge Income Tax Returns filed for last 3 years

In case, the person has been in the job for less than a year, then the bank may insist on an employment letter. These are the documents required for SBI home loan eligibility based on salary. We now turn to required documentation for self-employed home loans.

Are you self-employed? – be ready with these documents

In case you are self-employed, here are the documents you need to submit for the home loan process.

  • Business registration under Shops & Establishments Act, VAT certificate, GST Certificate, other statutory registrations from SEBI, IRDA etc.
  • As financial statements, self-employed persons must submit IT returns for the last 3 years along with the schedules showing detailed calculation.
  • Audited copies of the income statement, balance sheet and cash flows statement for the last 3 financial years.
  • Apart from the financial statements, the self-employed professional must also furnish details of loans, if any, of the individual and the business.
  • Bank account statements in terms of the current account of the business entity and savings account of the individual must be submitted for last 6 months.
  • In case of partnership, copy of the partnership deed and list of partners and in the case of private limited company, a certified copy of list of directors with individual shareholding must also be submitted. Companies must also submit copies of their memorandum of association (MOA) and articles of association (AOA).
  • Copies of professional qualification in case of self-employed professionals must also be submitted to the bank for the home loan.

Document that are common across all borrowers

What we have seen in the previous two points are documents unique to individual home loan borrowers and self-employed borrowers. However, there are some general documents that all borrowers must furnish. Salaried persons and self-employed professionals must submit their KYC (know your customer) documents. This includes proof of identity, proof of address and proof of active bank account. In addition, all details pertaining to the proposed property to be acquired must be furnished for the home loan.

To improve your chances of getting the home loan, you can also furnish details of other assets owned by you, with documentary evidence. All such documents must be submitted as self-attested photocopies with originals ready for spot verification.

The good news is that SBI home loan eligibility based on salary is just one part of the story. There are also specifically designed and flexible self-employed home loans extended by the bank for professionals and businessmen. Earnings and creditworthiness will be the two main criteria deciding your eligibility for the home loan.

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