A pre-approved home loan is a pre-sanction approval given to the potential home buyers before the finalization of the property. It aids the customers to negotiate with the builders/sellers. In such a loan offering, the eligibility is assessed based on your income, creditworthiness, and financial condition. The rate of interest for pre-approved home loans is the same as that for regular home loans. The repayment tenure of a pre-approved home loan can go up to 30 years.
Benefits of Pre-approved Home Loan
Loan disbursal process becomes easy and fast
Since all the verification is done during the processing of the pre-approval stage, the disbursal of the loan becomes very easy and fast. The only process left is the property document verification, after which your loan is disbursed.
Search for the property becomes easy
When you have a pre-approved home loan, you are better aware of your budget. It further eases your search by limiting it within the budget.
Better negotiation with the builder
A pre-approval loan helps you to negotiate with your builders. When you have the sanction letter in hand, the financial institution gives you more importance as they understand that you are more serious about the purchase.
Planning your finances becomes easy
With a pre-approved home loan, you can easily know your current financial standing. It will help you to plan your savings so that you can give a higher down payment to bring down your loan limit and your monthly EMI payments.
Process of getting a pre-approved home loan
Documents required for a pre-approved home loan
The applicants need to submit the following documents to get a pre-approved home loan: