Building a home requires considerable investment. You might not have that much funds at your disposal. That is where a home loan can help you fulfill your dreams.
The application process for a home loan is, however, quite lengthy. It can take up to several days. What if the property prices fluctuate in the meantime? Well, a pre-approved home loan can help you in that case.
What is A Pre Approved Home Loan?
A pre-approved home loan is the approval and sanction of your home loan by the lender based on your financial status and creditworthiness. Apply online for home loan and your lender might give you instant e-approval.
Benefits of Pre Approved Home Loan
- The loan processing will be faster if you have the pre-approval.
- It can help to establish trust with the seller. Once they see your pre-approval letter, they know you are serious about buying the property.
- Pre-approval will help you plan your budget accordingly since you will know the loan amount beforehand.
Steps To Get A Pre Approved Loan
1. Check Your Credit Score
Your credit score will play a significant role in the pre-approval of your home loan. So, make sure you have a decent score. There is nothing to worry if you have a good credit history and have repaid all your previous dues on time.
2. Present Your Income Details To The Lender
Show all your income sources to your lender. If you have a side hustle apart from your regular job, don’t forget to mention it to your lender. That will increase your chances of getting pre-approval. You will also need to submit your bank statements and income tax returns.
3. Submit Your Personal Documents
YOu should know what are the documents required for home loan and your lender will need your personal documents like identity proof and proof of residential address to pre-approve your loan. You will also need to submit your business documents if you are an entrepreneur.
What Should You Remember While Taking A Pre Approved Home Loan?
1. It Doesn’t Guarantee The Approval Of Your Loan
Well, even after pre-approval, your lender might reject your loan application. It might happen due to several factors. Your lender might feel that your income is not sufficient to repay the loan at the time of approval.
2. The Pre Approval Comes With With A Validity
Don’t think that the pre-approval offer is valid for a lifetime. It has an expiry date.
3. The Interest Rate Will Get Fixed At The Time Of Pre Approval
The market rate of interest might change. But you will have to pay the rates sanctioned during the pre-approval. So, you won’t be able to benefit if there is a drop in the rates. If you have any doubts regarding the pre-approval process, you can dial the home loan customer care number.
Pre-approval will save a lot of your precious time. You will be able to buy your dream house quickly. Moreover, the process will be smoother. So, why are you still waiting?