Is Sale Agreement Required for Home Loan?

When you apply for a home loan to purchase a house, you may think, is sale agreement mandatory for home loan? So, let me tell you yes, it is required. Since the sale deed is the final document to attest to your ownership of a property, it is required for home loan approval. Let me share more details on it below.

Why is Sale Agreement Required for Home Loan?

A sale agreement is a crucial legal document that establishes the understanding between the buyer and the seller about the terms of the property sale. Without it, most banks and financial institutions will not proceed with a home loan application.

1. It also confirms the buyer’s intent to purchase and the seller’s intent to sell the property.

2. It includes details such as the sale price, payment schedule, possession date, and terms and conditions.

3. Banks require the sale agreement to:

4. Verify the legitimacy of the deal

5. Assess the property’s value

6. Determine the loan amount based on the sale price

In some rare cases (like loans for plot purchase or construction), a sale deed from a government authority or builder may suffice temporarily. I hope you found this helpful.

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What are the Property Documents Required for Home Loan

Hey Guys,

It is not possible to get a home loan without sale deed. I am going to share my personal experience regarding this. Not only the sale agreement for bank loan, but also the encumbrance certificate, property map, allotment letter from the Builder, NOC from Builder, MODT, property chain, registration & stamp duty receipt, and other property documents are required for a home loan.

Accidentally, I misplaced the original document of the sale deed. I was happy that at least, I have a photocopy of the same, which would help me in obtaining a loan. However, I was wrong. The photocopied sale deed for home loan was not accepted. There was the requirement of not only loan sale agreement, but also other supporting documents like an encumbrance certificate, Khata certificate, and tax paid receipt. All should be original.

Finally, I obtained a certified copy of sale deed from the sub-register office to obtain a home loan. Hence, I’d like to conclude here by reiterating that it is not possible to get a home loan without sale deed.

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Yes, when I applied for a home loan, I had to present the sale agreement. And I believe it's critical to properly understand all the paperwork required for home loans and financing. The sale deed is one of the documents you'll have to deliver to your lending bank. Keep reading to know about the property documents required for home loan.

What documents are required for a home loan?

• Property-specific documentation

• Original employer salary certificate

• Past two financial years' Form 16/IT Returns. 

• The last three years' worth of copies of IT returns and evaluation orders.

• Challans as proof of paying advance income tax. 

• Non-salaried persons must provide proof of their business location.

• The last three years' worth of copies of IT returns and evaluation orders.

• Challans as proof of paying advance income tax.

• Form for requesting a loan.

• Three passport-size pictures.

• Identity Proof

• Evidence of residence

• Passbook or bank account statement over the last six months.

• Signatures verified by your bank.

• Personal property and a listing of debts.

What is a sale agreement for home loan?

An agreement of sale is a legal document that specifies the conditions that the seller and the buyer have settled for the purchase or sale of real estate. The agreement for sale of mortgaged property contains every term that will apply to the sale or transfer of the property. The selling agreement does not create any rights or interests in the property for the buyer.

This is the list of the property documents required for home loan.

• Property Location and Detailed Description of the Parties in the Agreement
• Schedule of Additional Payments (if any)
• Specifications of the to-be-developed property
• Construction Schedule Penalty Clauses in the Event of Default by any of the Parties
• Both parties' signatures as witnesses

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