Thinking of buying a new home or building? But confused and overwhelmed with Bank Loan procedures?
In this series we will go through documents required by banks for Home Loan.
Buying a home is one of the biggest milestones in life. However, the process can feel overwhelming as the procedure is a lengthy one when it comes to securing a home loan.
In this blog, we’ll talk about the documents banks in Nepal ask for when you apply for a home loan.
1. Personal Identification Documents
Before the bank approves your loan, it needs to verify your personal identification. Here’s a checklist of documents to have ready:
- Photographs: Banks require two recent passport-sized photos.
- Citizenship Certificate: Proof of Nepali citizenship.
- Relationship Certificate (If Applicable): If you’re applying with a spouse or family member, this document shows the relationship between you and your co-applicants.
- Marriage Certificate (If Applicable): Banks request Marriage Certificate if you’re applying as a couple.
- Company/Firm Registration (If Applicable): For self-employed individuals, proof of business ownership is essential.
- PAN/VAT Certificate (If Applicable): If you own a business, your PAN or VAT registration certificate is required by the bank.
- MOA/AOA (If Applicable): If you’re a business owner, the Memorandum of Association (MOA) or Articles of Association (AOA) may be needed.
- PAN Number: All applicants, whether salaried or self-employed, must have their PAN (Permanent Account Number).
- Location Map: A simple map showing the location of your current residence.
These are the personal identification documents that the bank needs when applying for a home loan in Nepal.
2. Collateral Related Documents
When applying for a home loan, you must provide documents related to the property you’re purchasing or using as collateral. These documents are required by the bank so that it can recover its money if things don’t go as planned.
- Land Ownership Certificate: This document proves that you own the land.
- Land Revenue Receipt: Proof that you’ve been paying taxes on the land as required.
- Rajinama/Bakas Patra/Anshabanda Paper (If Applicable): These are legal documents related to the transfer of property.
- Charkilla (Boundary Map): A detailed boundary map of your property.
- Nirman Ijajat (Construction Permit): If you’re constructing a house, this document is essential.
- Nirman Sampanna (Completion Certificate): If the house is already built, you’ll need to provide this certificate.
- Approved House Map: The approved layout and design of the house.
- Blueprint and Trace Map: These maps provide technical details of the property.
These documents prove to the bank that the collateral you’re offering is legal, valuable, and suitable for loan purposes.
3. Income Source Documents
Your income is one of the biggest factors banks consider when approving a home loan. The bank needs to be assured that you can make monthly payments as required.
- Salary Certificate: Employees with salary need this certificate to show their current income.
- Rental Agreement (If Applicable): If you earn rental income, this document will serve as the proof.
- Audited Financial Statements (For Business Income): If you’re self-employed, banks typically request your company’s financial records for the past two years before approving the loan.
- Pension Certificate: For retired employees, the pension certificate serves as proof of ongoing income.
- Foreign Employment Income: If you’re working abroad, you’ll need a valid work permit, salary certificate, a bank account statement, and a valid passport with a visa.
- Tax Clearance Certificate or Latest Tax Paid Receipt: Proof that your taxes are in order, especially for business owners.
Securing a home loan in Nepal may seem like a complicated process but being prepared with the right documents can help to ease the process.Having a clear understanding of these requirements can help you avoid last-minute rushes and ensure that the process is a successful and smooth one.
