How to Write a Salary Certificate Letter for a Home Loan?

How to Write a Salary Certificate Letter for a Home Loan?

Consumers increasingly have access to a diverse range of home loans through financial organisations. Whether you want to purchase a house or renovate or remodel your current one, financial institutions can provide you with a personalised package to match your specific home loan requirements.

But most of the time, banking and financial institutions require a Salary Certificate Letter. Salary Certificate Letter is delivered to a specific banking institution in order to get home loans. It would become an unofficial formal communication between different companies about an individual.

But sometimes individuals tend to get confused in writing one, that's why we have created this article on tips and suggestions on how to write a salary certificate letter.

But before that, let's look at the definition of a home loan, documents required apart from a request letter for salary certificate for housing loan, its benefits and how to apply for it in 2022.

What is a home loan?

A home loan, often known as a mortgage, is a sum of money obtained by a homeowner, typically from banking institutions and mortgage lenders. The borrower is required to repay the loan amount plus interest in Easy Monthly Installments (EMIs) over duration of time that can range from 10 to 30 years, depending on the type of the debt.

Documents required for Home Loan

In principle, the paperwork necessary to submit your home loan application is nearly the same throughout all banking institutions; nevertheless, they may change based on special requirements, etc. Banking institutions demand the following paperwork in order to approve a loan application.

Identity proof:

• A copy of your passport
• Voter ID card
• Driving licence
• Aadhaar

Address proof:

• A copy of your passport
• Voter ID card
• Driving licence
• Aadhaar
• Water bill
• Electricity bill

Financial documents:

• For Salaried Individuals
• Original/certified copy of the most recent three months' payslips
• Duplicates of IT returns from the previous two years, officially recognised by IT Dept/IT.
• Salary certificate letter
• Assessment orders or Form 16 from the employer for the last two years
• Bank account statement over the previous six months

Non-Salaried/Businessman/Professional

• The last three years of IT returns (2 years for professionals), covering revenue, balance sheets, capital structure, auditor's report, and so forth.
• Licence for Company Registration
• Bank statement for the previous year
•  Property-Related Documents
• Stamped sale agreement/Sales Deed or letter of Allotment NOC from the developer.
• Possession Certificate
• Possession Certificate
• In the event of a newly built apartment, a bank account statement is required, as well as occupancy certificate.

Read about how to increase home loan eligibility

How to Apply for a Loan

Step 1: Go to the banking institution's website and click the 'Apply Now' option.

Step 2: Fill out the basic KYC information and submit the necessary financial documents.

Step 3: Wait for evaluation and approval.

Step 4: Obtain quick clearance.

Step 5: Approve the credit proposal and approve disbursements.

Benefits of Avail home loan

Here are some of the benefits of availing of a home loan:

•  Save money on interest

Many people consider liquefying their current resources to purchase a property under the delusional notion that all credit schemes impose outrageous interest charges. On the positive side, home loans are among the most affordable loans currently available in the market. You could save a considerable amount of money on interest rates while still living comfortably.

•  Tax benefits

To promote home sales more appealing for house buyers/investors, the government gives a variety of tax deductions, mainly if you acquired the property with a home loan.

• Sectin 80C is concerned with principal amount deductions:
  • Yu can claim a tax deduction of up to 1.5 lakh per year for both self-occupied and let-out homes.
  • Yu must also complete the building of the property before claiming the exemption.
  • T be eligible for this deduction, you must not sell your home within five years of purchasing it.
  • If yu sell your home within five years of purchasing it, all deductions received will be recovered in the year you sold it. This sum will be deducted from your earnings for the year of sale as well.
  • If yu are a co-borrower and co-owner, you can each receive a principal deduction of up to 1.5 lakh.
  • Stamp duties and registratin costs are also deductible.

Also read about apply for home loan with lowest interest rate

• Deduction for Joint Home loan

If a home loan is taken out by two or more people, all of them can claim a deduction for the interest charged up to Rs 2 lakh. You could claim the tax on the capital paid as well, up to a maximum of 1.5 lakh per person. To be eligible for this deduction, all candidates must be co-owners of the property.

•  Investing in a long-term appreciating asset

According to statistics from leading financial agencies, house prices have been steadily rising over the previous decade. Considering that more than a third of India's population is young and will soon wish to buy a home, most analysts anticipate that housing costs in India will continue to rise in the long run. As a result, purchasing a house is one of the safest investments you can make.

What is a Salary certificate letter?

A salary certificate letter for home loan also contains a section that is directed to a particular banking institution and describes why the certification was granted. This documentation could only be used for the indicated reason when requesting the letter. This document would not be submitted to some other establishment or for any other purpose.

If you intend to seek a home loan in India, you must have this documentation. It acts as proof of your income and position. It is critical to double-check that the salary certificate is written on the business's letterhead, approved by the authorised person, and sealed with the company's rubber stamp.

You can read about financial assets against which you can avail loan

Things to remember when you’re writing

The salary certificate format for home loans is very simple and not very complicated. So, begin the letter by respectfully addressing your current employer.

• Record the date you're writing the letter.
• Demonstrate your commitment to your organisation. This is decided by factors such as your length of service with the business, your disciplinary history, and your performance outcomes, among many others.
• Be direct and precise.
• The letter must be formal in tone.
• Address any grammar and typographical problems in your text.

Thing to avoid

• When writing, avoid using acronyms or emojis; this is a formal letter, just like all the others.
• Don't go into too much detail in your letter. Please keep it simple and direct about why you require it.

Conclusion

Choosing the perfect home is essential, but getting the perfect financing is more consequential. Because the house loan you pick will be a long-term commitment, remember to read the necessary information before deciding on the right home loan for you. Before asking for a home loan with any provider, you must study the eligibility requirements, rate of interest, and loan repayments requirements.

We hope this article assists you in increasing your chances of availing a home loan.