Home..Its our biggest investment in lifetime and it requires huge amount of capital . Almost all people are going for home loan to buy dream home. So, getting home loan is as important as choosing home. Are you looking for option to know how much loan you are eligible to get before finalizing the home..? If yes, Pre approved home loan is for you.
Ram decided to buy home and he finalized beautiful 3 bhk worth 60 lakhs . He has 20 % of outstanding amount with him and want to go for home loan for remaining 80 %. For initial booking of this flat he paid 5 Lakhs and applied home loan. After he submitting all required documents, he heard shocking news from bank saying that his credit history is not so good , so he is eligible to get only 25 Lakhs as loan . There is no other option for him to get remaining money to buy that flat ,so decided to cancel the deal and lost his initial booking amount also. If Ram would have gone pre approved home loan then he had some idea on home loan amount he is eligible for.
What is Pre Approved home loan:
Before you are buying home, banks verify your documents and credit history to approve your application and give you a pre-approved loan sanction letter. This pre-approved loan letter is valid for a specific period of time and it also mentions loan amount limit and specific interest rate.
Your documents consists of identity proof and residence proof, the latest salary slip, past six months’ bank statement, past three years’ income-tax returns , Form 16 need to submit at the branch and they will verify your records and check your CIBIL report and decide the loan amount eligible for.
Charges for pre approved loan is varies from bank to bank . Few banks have no charges and other having 500 rs to 2000 rs depends on bank.
1.Quick Processing of your home loan as one part of verification of your documents is already completed before purchasing home. Now only home document verification is left before sanctioning loan.
2. As you know the loan limit, now you can concentrate on searching home within your budget without thinking about loan eligibility as you already know the approximate amount you will get as loan.
3. There is chance of having more negotiation power with builder as he knows that you are genuine buyer with that pre approval letter.
Pre approved home loan letter is valid for usually 6 months , so you need to complete your home search within that period to avail loan.
If you applied for pre-approval loan application many times, you get identified as person who is looking for credit constantly and that interns reduces your credit score.So use this pre approval loan option once you decide your home in few months.
Are you going for Pre approved home loan option before buying home?