Pre-approved housing loan is a principle sanction which is given by the bank for a specific loan amount. A practically robust process is followed by the banks for determining the amount of loan. They will want from you to present a lot of information like income proof, income tax returns, Pan details, bank account statements, identity proof, salary slips and many other. Banks also get data from CIBIL for checking the credit history of a person. After the checks are in pace and the bank pre approves the loan then it will hand over the letter which states that an in principle sanction of a specific home loan amount has been settled and will be applicable up to a particular period. Moreover, choosing for a pre-approved property along with a pre-approved loan may facilitate a quick home buy process, the pre-approved rank for your loan declares your repayment capacity and the same for the belongings specifies the reliability of the builder.
Some banks also take the rate of interest at which the loan will be offered, the base being the interest rate at the time of pre-approving the loan should be valid. You should note that the pre-approved loan is applicable only for a specific period in most cases it is 6 months, post which the person will have to go during the process yet again.
- Once a loan has been pre-approved, the bank is not compelled to give the loan as banks state that the in principle approval is subject to confirmation of property documents and the belongings itself in a clear manner.
- Numerous banks charge a pre-approval loan processing fee which is refunded in the case loan is taken, whereas some banks do not charge any type of fee.
Advantages of Pre-approved home loan:
- Greater cooperation power: A pre-approved loan will make it obvious to the seller that you are a serious purchaser as well as declare the fact that you have the monetary means to close up the deal. Therefore, he will be eager to present you a discount or a few additional benefits so that the transaction is sealed.
- Make certain that you narrow down your home search: Receiving a loan pre-approved will assist you to aim a house that is inside your budget. This will prevent you from straying houses bigger than your budget will mechanically be eradicated.
- Quicker loan disbursal: The processing of the loan request will take place at a much quicker speed if the loan is pre-approved. This makes sure that you save time. Many times, persons have lost out on good houses, because they were unable to meet the resources in time. If you want to make certain that you do not want to drop out on a dream home because of outdoor factors such as awaiting the loan sanction, awaiting the loan sanction and others then you can choose for the pre approved home loan for ensuring that the home purchase process goes smoothly.
- Reliability with real estate agents: Known that the agent will receive commission on the transaction, he will set in extra efforts as he knows you are an authentic purchaser.