If you’re wishing to buy your dream home but don’t have enough funds then you must be considering a loan in your mind already. A lot of banks entice their customers by giving perks like no paperwork, instant loan in 48 hours to make your dream come true. A dream home plays an important role in an individual’s life. Most of us take a lot of time before choosing the right home for them as per their desires and financial meets. The fear of not getting the right amount of loan or losing your desired property because of delay or any kind of glitch in the home loan pre approval process of your loan can be disheartening. Pre approved loans came out to be a better alternative in this case.

The feeling alone of losing the property you like is terrifying. If you’re on a quest for the right property to invest in, there’s no place for failing to gather finances through a loan. In this case, Pre approved loan is your key to ensure your dream property in your name.

pre approved loan

What Exactly Is A Pre Approved Loan?

A pre approved loan is a sanction to potential buyers to buy their property after scrutinizing their credit score and other assets. Once the documentation process is done, the bank will provide you a pre-approval letter which can be used within a time period of 4 months (varies with the bank). You can sanction the approved amount anytime within those 4 months and can look for better property deals during that period.

The Difference Between A Pre-Qualification And Pre Approved Loans

A mortgage Pre-Qualification Loan is a rough estimate of the bank based on how much you wish to send on your dream home. Based on this, a sum of amount is decided from the lender’s end whereas in case of Pre-Approved loans the lender has actually checked your credit score and other parameters on which your loan qualifies. The power of Pre-approved loan is such that you can negotiate more strongly with the seller as it increases the credibility of your quotations on your desired property.

To obtain a pre-approved letter or certificate the lender or bank will go through your past financial data, remunerations, salary credit, balance sheet, credit card records, current debts and more. After this, within a short period of time, they will provide you with a certificate or a pre-approval letter that will sanction you the access to get approved for a loan instantly. You can relax from the financial side at this time and can indulge in looking for your dream home for the next 4 months.

This makes the overall task way easier than to get a loan at the last moment that may ruin the overall deal at the last moment and the fear is constant.

pre approved loan

Procedure For Getting A Pre Approved Loan

To get a pre-approved loan all you have to do is to contact a known bank or lender that can provide you pre approved loan. Several banks these day offers you great interest rates and facilities to avail pre-approved loans for home buyers. The good thing is that the interest rates for a pre-approved loan is way less than the conventional ways of sanctioning a loan.

Also, due to rise in competition, you can compare interest rates and other factors provided by various lenders who are willing to make your dream come true.

Banks like SBI and Hdfc provides good interest rates on pre-approved loans for home buyers. You can fill in the form after which the bank will scrutinize your credibility score on ensuring which you will get your pre-approval letter.

pre approved loan

If you’re thinking of applying for Pre approved loan, Here’s the list of documents that you need to get ready in hand.

  1. Proof Of Salary:

There’s no loan thing such as “No-verification” or “No-documentation. All borrowers must prepare documents such as their bank statements of last 6 months, pay-slip and most recent two years tax returns.

  1. Financial Assets:

Bank-statements and investment account statements to ensure lender that you have enough funds to complete down-payment and closing deal value. In case, you have borrowed down-payment money from a friend or a relative you have to submit a gift letter.

  1. Your Credit Score Matters:

Depending upon the lender you choose, the requirement for a specific number of credit score is decided that gives you an idea that how much loan you can take. Credit scores depends upon your transactions, credited debited amount and the status of any previous loan you must have borrowed.

  1. Whether You’re A Current Employee Or Not:

Not just your pay-slip, lenders do verify your current workspace and office by giving it a visit. This is to ensure the designation and salary that you have mentioned in your documents.

  1. Other Documents:

Apart from this, the lender will get a copy of your Voter-Id card or driving license. The more cooperation you will show through the process, the more easier and quicker the process will be.

Queries Related to Pre Approved Loan:

  1. How much time will it take to get a pre approved loan letter?

In today’s competitive scenario, it usually takes a week or so to get a pre-approved loan letter in your hand. Your cooperation matters the most in this case, the quicker and transparent your documents will be, the easier it is to get your desired loan.

  1. What Credit Score Is Good To Take Pre approved home loan?

In India, a credit score lying in the range of 300 to 900 is considered good enough. For a pre approved loan for a fhome, 750 is considered a really good credit score.

  1. What Are The Major Benefits Related To Pre Approved Loan?

Some of the major benefits related to pre approved loan is to get the amount while having all the time to invest in the quest of your desired property.

  1. What Is The Validity Period Of A Pre Approved Loan?

The validity period of a pre-approved loan is around 4 months from the date of sanction. The duration may vary bank to bank.

  1. Once I Will Get The Sanction Letter, When Will I Get The Loan Amount?

Once you have decided the property, the amount will be disbursed.

  1. Is Their Any Cancellation Fee Charged In Case Of Not Taking A Loan Before Pre Approved Loan’s Expiry Date?

Yes, some amount of fee is charged in case of cancellation.

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This post was written by Resident Blogger.

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