Several individuals have a misconception that getting a home loan can be a tiresome process, especially if they are self-employed or own a business. Getting a home loan sanctioned depends on factors such as the applicant’s financial stability, repayment capacity, credit history, etc. Whether you are a salaried professional or a self-employed individual, you are eligible for housing finance if you match the conditions talked about in this article.
Who Fall Under the Self-Employed Umbrella?
Generally, there are two categories of self-employed people namely, professionals and non-professionals. The professionals include lawyers, doctors, CAs, CSs with their own practice, MBAs, engineers that have set up a business or work as independent consultants for other firms. The non-professional category includes traders, independent contractors, commission agents, etc.
Once you have decided to take a home loan and have the desired amount in mind, start collecting the following documents before approaching authorities with your request. It is extremely important to strictly adhere to each item on the document checklist.
|Item category||Document needed|
|Identity proof||Passport, Adhaar card, Voter ID card, Driving license (any 1 of these items)|
|Residence proof||Bank statements, Utility bills, Passport, Aadhaar card, Voter ID, card, Rent agreement (if applicable) on stamp paper, Life insurance policy, Credit card statements not older than 3 months (any 1 of these items)|
|Income proof||IT returns, PAN card, TAN card, Bank account statements of last 6 months (all are required)|
|Financial documents||Latest balance sheet, Audited profit and loss account (all are required)|
|Property documents||Purchase agreement|
|Other documents||Last 6 months’ payment statements of any pre-existent loans if applicable, CA/CS certified last 6 months of shareholding patterns, MOA for companies, Partnership deed for firms (all are required)|
Important Loan Approval Factors for the Self-Employed
- Authorities take into consideration your net profit, that is, profit after adjusting depreciation, depletion, etc., before sanctioning a housing loan.
- Apply for a home loan when your business or practice is doing well, as this will mostly ensure a positive outcome from the lender.
- Offer a large down payment and make sure that you have a good credit score. This is highly favoured by the authorities.
- You are allowed to have a salaried co-applicant share the burden of your loan. For example, taking a joint loan with your salaried spouse tilts scales in your favour.
- Make sure that you file your ITRs timely as the lenders will thoroughly check your last 2 ITRs.
Additional Read: Planning to buy a home? Make sure to follow this Home Buying Guide
If you are looking to move into your first home, or are buying property for long-term investment purposes, taking a home loan as a self-employed individual is just as easy and convenient as it is for any salaried professional. Apply for housing finance with Tata Capital. Check your home loan eligibility by using the free home loan calculator or home loan EMI calculator on our website. Tata Capital’s EMI calculator for home loan allows you to optimally choose your EMI that helps you take advantage of our competitive home loan interest rates. Take a home loan with us and avail of several home loan tax benefits under Sections 24, 80C, 80EE, 80EEA.