The documents required for a home loan application are more or less the same for various banks, Finance Companies and other lending institutions. A few specific requirements may vary from lender to lender. The home loan documents required might also differ on the basis of your loan scheme, the purpose of the loan, individual credit profile, etc. Check below the list of common home loan documents that your lender might request at the time of home loan application.
Checklist of Documents Required for Home Loan
The list of home loan documents requirements to apply for a housing loan is as follows:
2. Who can obtain the loan
Salaried employees
Business/self Employed
Income earners from Agriculture
Rental Income earners
Others who can provide details of a constant income from authorized personnel.
You can apply for the loan either individually or jointly (with your spouse, with parents or with your children)
3. The Loan amount you can obtain
From Rs. 50,000/- upwards (Maximum repayment period varies according to age)
Purchase of house: 70% of the forced sale value
Construction loans: 80 % of the forced sale value of property and BOQ
Purchase of Building Blocks 70% within Municipality limits and 60% Pradeshiya Sabha limits
List of Documents to be submitted 1. Main Documents ie - Photo copy of National Identity Card of Applicant/s
Personal Details
Birth Certificate Original and 2 photo copies National Identity Card Original and photo copy / valid Passport (period not expired) Marriage certificate Original and 1 photo copy. (Applicable only to joint applicants)
2. Completed home loan application form
3. Documentary Evidence to Repayment Capacity
Employment Details
PAYE Tax Details
Documentary evidence of other Income
4. Security Documents
Proof of Income
If you are a salaried employee, a statement of salary particulars and confirmation of employment from your employer with full details of deductions along with duly perfected Form from the institution you plan on borrowing from
Securities - Legal Documents
Is it necessary to offer a security in order to obtain a housing loan?
Yes. The house/land to be constructed / purchased or the house to be completed/repaired/extended, or another immovable property should be mortgaged to the Bank as a security for your loan.
9.1 Original deed and 2 photo copies along with copies of previous deeds and plans to cover title up to 30 yrs
9.2 Extracts of volume folios of the Registers maintained at the Land Registries to cover title up to 30 years.
9.3 Approved survey plan with 3 copies there of (plan should be drawn within 20 years). (access to the land connected to a main road should be shown)
9.4 Documents to be obtained from Local Government Authorities:
Certificate of ownership
Certificate of non vesting
Street line Certificates (only if applicable)
Building line Certificate
Notice of Rates Assessment (current year)
Receipt for payment of Assessment Rates for the last quarter of current year.
If any Pradeshiya Sabha does not issue the above certificates please obtain a certificate stating that the above are not applicable. This certificate should not be older than 6 months. If sub-division approval is not required a letter to this effect should be obtained by the local authority.
Original deed and 2 photo copies along with copies of previous deeds and plans to cover title up to 30 yrs
When immovable property is offered as security. Following documents should be furnished.(Original + 2 Copies)
Title Deeds of the Property
Survey Plan – Approval from Local Authority if a sub division
Extracts of encumbrances obtained from the Land Registry for the last 25 years
Non -vesting / Street Line / Building Line Certificates from the relevant Local??? Authority.
Affidavit re-ownership of the property/Land Reform Commission Law.
Receipts for payment of Rates/Taxes issued by Local Authority
Sketch to the Location & Access to Land.
Street Line and Non Vesting Certificate
If Construction/ Completions / Extension / Renovation of a House.
Approved Building Plan
Bills of Quantities (BOQ)
For Purchase a block of land and to Construct a house/Purchase a house
A Letter from the Vendor stating the Selling Price, Advance paid & conditions if any
Certificate of conformity.
Valuation Reports
This should be obtained from inhouse valuation officer or from an officer in the Bank’s Panel. Fee payable
Access to the property
A rough sketch showing access to the property from the nearest town. If the access road is not a public or common road , the access way should be conveyed by a deed. Access should be depicted in the survey plan. The availability of an access road with a minimum width of 10 feet is necessary.
Release of loan
I. Purchase loans - On receipt of day book receipt from the Land Registry, Form 54, and the loan amount will be disbursed in full. (Transfer deed and mortgage bond to be executed by one of our in-house lawyers.)
II. Construction loans - On receipt of day book receipt from the Land Registry, the loan amount will be released in installments. Construction work must be finalized within 12 months of the receipt of the first installment during which only interest on disbursed amount are payable
III. Redemption loans - On receipt of registered M.B. & extracts and a letter of undertaking from the relevant institution stating that the original documents in their custody will be released to us after full settlement of loan is necessary
How much can you obtain?
No upper limit. The amount will depend on the following:
Repayment capacity
Value of property
Age – (normally up to 60 years)
Applicant’s Equity Contribution - 25% of Construction or Purchase value
Repayment period
Maximum 20 years * For Construction of a House
For Purchase of a House/Land
Maximum 10 years For Renovation/ Extension/ Completion of a House
Maximum 5 years For Sri Lankans employed overseas
Repayment
Repayment should be made in equal monthly installments on the basis of diminishing capital.
Fixed or Floating Rates of Interest what is suitable for you?
The borrowers could be at a risk in instances where the rate of interest goes up. Most government banks still follow the fixed rate system for home loans. Although it is a fixed rate, the lending bank enjoys the right to change the rate at its discretion, even upwards. Practically this does not happen in Sri Lanka.
The attraction of a floating rate home loan is that it is not subject to pre-payment charges.
This would appeal to individuals who expect lump sum money, which could be used to reduce their loan exposure. When considering a fixed rate home loan over a floating rate loan, the important consideration for the customer is that if the interest rates were to rise, he would be protected from the interest rate risk.
Fixed rate loans are generally priced higher when compared with floating rate products.
Option one – within 4 working days
If the loan is to be processed within 4 days, an Express Processing Fee of Rs. 50,000/- will be charged upfront irrespective of the loan amount in addition to the 0.9% processing Fee charged on the value of the housing loan.
Option two – within 10 working days
If the loan is to be processed within 10 days, an Express Processing Fee of Rs. 20,000/- will be charged upfront for housing loans of Rs. 2 million and above in addition to the 0.9% Processing Fee charged on the value of the housing loan.
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