Get Home Loan Without Income Proof Or ITR

Borrowing a Home Loan without Income Proof is not rare, but it is definitely difficult. Since the Home Loan is a secured loan, most of the banks/HFCs assess the repayment capacity of the borrower before granting the home loan. There are some Banks / HFCs which provides loan by calculating the borrower’s raw income, rental income, co-applicant’s income, freelance income, cattle income, pension income, part time job income etc.

What is Home Loan / Housing Loan ?

A Home Loan / Housing Loan simply means a sum of money borrowed from a Bank or HFC to purchase a Home / House. Home Loans consist of an adjustable or fixed interest rate and people generally take a Home Loan for either buying a Flat/Floor/House/Villa or a plot of land for construction of a house (Composite Loan = P+C), or renovation, extension and repairs to the existing house.

The property is mortgaged to the lender as a security till the repayment of the loan. The Bank or HFC will hold the Title Deed to the property till the Loan has been paid back with the interest due for it. The interest rates for Home Loans can be fixed or floating, or partly fixed and or partly floating suiting the needs of the borrower.

There are also certain tax benefits available on Home Loan under the Section 80EE of Income Tax Act. However, the Income tax deduction can be claimed on Home Loan interest by first time Home buyers only.

How to Avail a Home Loan without Income Proof ?

When a person apply for a Home Loan, the Banks / HFCs will assess the market value of the property. Based on the market value, the loan amount will be decided by the Banks / HFCs.

Income proof is essential to determine the repayment capacity of the borrower. If the applicant lack a stable source of income, availing a loan can be difficult. Income is an important parameter for deciding the amount of loan that can be sanctioned to the borrower. Income documents are checked to access the creditworthiness of the borrower.

While a person need to keep his property as collateral to avail loan, most Banks / HFCs will ask him to submit income proof. This can be difficult if applicant is freelancer or unemployed.

To avail Home Loan without Income Proof, you may need to fulfill other requirements. As a borrower, you can use different methods to avail a Home Loan without Income Proof. Following are the methods that can help you in attaining a mortgage loan :-

1. Add A Co-Applicant

If you have a family member with a valid credit history and a regular income, consider adding them as a co-applicant. Adding a co-applicant will increase the chances of your loan getting approved.

2. Check Your Banking Activities

Before applying for a loan, always have a glimpse of your savings bank account activities as lending institution tend to scrutinize the bank statements. A borrower must maintain the minimum balance amount or have sufficient funds. Sound banking activities increase the chances of availing a loan.

3. Justify Why You Do Not Have The Necessary Documents

Filing ITR is very important. If you haven’t filed it for the previous year, please explain the reason genuinely to the credit / relationship officer. Also, to be on the safer side, consult a tax consultant right away and file your taxes for the current year.

4. Choose Lower Loan to Value

Loan to Value(LTV) indicates the percentage of the loan that the bank will lend. For example, if the LTV is 90%, the borrower has to pay the remaining 10% while 90% is funded by the bank. If you do not have income proof or ITR, try requesting the Bank / HFC to offer you a lower LTV and increase the chances of approval. Do not forget that in choosing lower LTV, you will land up shelling the remaining from your pocket.

5. Explain Your Income Clearly to Credit Officer

Before approving or rejecting your loan application, a Credit Officer of the Bank/HFC will visit the property and source of income for inspection. At this time, if you run a business or planning to pledge a commercial property, it is very important to explain your income details to the concerned officer. Also, let the officer know that you do not have income proof or ITR. The officer will take into account all the information provided by you when calculating your annual income and repayment capacity.

Home Loan without ITR

Getting a Loan Against Property without ITR or Income Proof is an uphill task. It requires a lot of convincing, explaining, and patience. The financial industry is booming day by day and loans are available for all types of customers. Doing research online or offline and talking to different lenders offering loan against property and comparing their offers can help you to get a better deal. Check your loan against property eligibility before applying for a loan. This way, you can negotiate better.

CLSS for Economically Weaker Section (EWS) and Low-Income Groups (LIG)

The prime objective of the Pradhan Mantri Awas Yojana – Credit Linked Subsidy Scheme is to help the urban poor population by increasing the institutional credit flow to meet their housing needs. Economically Weaker Sections and Low-Income Groups who are seeking for housing loans from financial institutions and banks will be eligible for an interest subsidy of 6.5% for a period of 20 years or for the tenure of the loans, whichever is lower. This interest rate subsidy will be credited during the initial stage of the loan to the beneficiary’s loan account through the lending institute which will lower their Equated Monthly Installments (EMIs) from the beginning itself.

The funds borrowed by Economically Weaker Sections can be used to construct a new house or to add a room, kitchen, or balcony to their existing house. The beneficiaries under Economically Weaker Sections can have annual income up to Rs.3 lakh. Also, beneficiaries with an annual income of Rs.3 lakh to Rs.6 lakh fall under the Low-Income Group category.

The carpet area for Economically Weaker Sections can go up to 30 square metres and the carpet area for Lower Income Groups can go up to 60 square metres. Also, when it comes to EWS and LIG, preference will be given to women, Scheduled Tribes, Scheduled Castes, backward classes, minorities, people with disabilities, and transgenders.