Smriti plans to apply for a home loan to buy her dream house. Her salaried friend told her that she needs to have a steady source of income to avail one. However, Smriti is a doctor and does not record an equal amount of income every month. While there are months when she earns a lot, but that’s not the case always. She is now confused if she can avail a home loan at all. She inquired from a lender and was told that there are different home loan eligibility criteria for self-employed and salaried people and can avail a home loan easily.
If you are self-employed and looking for a home loan, check out the requirements.
The home loan eligibility for a self-employed person is based on factors such as age, income, profession and educational qualification.
- You must be an Indian resident.
- You must be at least 18 years old but not more than 65 years old.
- Your gross income should be a minimum of Rs 20,000 per month if you are a resident of a metro city (Delhi, Mumbai, Bangalore, Chennai, and Pune). If you live in other cities, your minimum monthly income should be Rs 15,000.
- You should be at least a graduate if you work in a private limited company or partnership firm.
If you wish to take a home loan in the name of your Hindu undivided family (HUF) or partnership firm or LLP or joint-stock company, the eligibility requirements are:
- Your enterprise (LLP, HUL, Company, partnership firm) should be in existence for at least three years.
- The applicant or co-applicant of the loan should be Karta of HUF.
- The minimum net income should be Rs 2,40,000 p.a. for cities like Delhi, Mumbai, Chennai Pune, and Bangalore. The minimum net income for other cities should be Rs 1,80,000 p.a.
Check if you are eligible by using an eligibility calculator before initiating the home loan process.
To avail a housing loan as a self-employed applicant, furnish the following documents:
- KYC documents
- Passport-sized photograph
- Copy of PAN card
- Professional qualification certificate
- Copy of Aadhaar
- Copy of residence proof for a self-employed individual – (any of the following – driving licence, water bill, electricity bill, voter ID, rental agreement, valid passport, life insurance policy, bank statement, etc.)
- Copy of residence proof for business entities – (any one of the following – establishment certificate, trade license certificate, PAN card, sales tax/ registration certificate, the partnership deed or memorandum of association, etc.).
2. Income documents
- Bank statement or passbook for the last 12 months.
- Income tax returns for the last three years
- Profit and loss account and balance sheet for last three years, duly certified by a chartered accountant
- Degree certificate if applicable
3. Property documents
- Title deed/ sales deed
- Sales agreement
- Sanction map
- Copy of chain documents of the property (if resale house)
- Copy of allotment letter
- Bank statement or copy of the receipt for payment made to the builder/seller.
The processing fee for self-employed and salaried applicants is different. Many lenders also offer differential interest rates for salaried and self-employed applicants. Before applying for a housing loan, it would be best to check your EMI through a home loan EMI calculator to determine your affordability.