A pre-approved home loan is generally given on the basis of your income, financial condition and creditworthiness. This loan is taken before the selection of property. In some cases, you can have access to this facility by giving an online application for the home loan.
Important factors to be considered in a pre-approved Mortgage.
You can gain access to pre-approved home Mortgage after the lender checks your repayment capacity. The authenticity of your property and identity is investigated thoroughly. The pre-approved loan is conditioned by a validity period and you have to avail this by the due date. You also need to fulfill all the legal and technical requirements to make the best of this deal.
For example: You have the offer of a pre-approved loan in hand. But unless and until your property issues are unclear or the structure of possession does not convince the lender or the required norms, the lender shall not grant you the home loan.
Validity period: The offer of a pre-approved loan remains valid just for a certain period which is around six months. You have to make sure that you finalize the property within that time-period without failing. Make sure that you fulfil all the requirements for the documentation such as the details of your income proof so that you do not have to apply for your loan application again and again.
Loan terms: At the time of disbursement, the final loan terms are worked out. For example: It might be possible that the interest rate would change by the time you finally choose your property. Consequently, the loan terms may also undergo a change.
Main advantages of a Pre-approved home loan
EFFECTIVE PROPERTY SEARCH
Once you have a clear idea about your financial structure, the acceptability of your home loan and the net amount you can gather from your personal sources, will arrange good funds for the purchase of your new home. You can also search a property according to your convenience. This will keep you away from unreasonable deals.
NEGOTIATION WITH THE SELLER
A pre-approved loan offer gives you better bargaining power. You can make great deals with the property seller. There is a pre-formed reputation of those who get access to pre-approved home loan. Somehow, such buyers are considered to be genuine by the lenders. The sellers are likely to offer pleasing discounts to such borrowers in contrast to other buyers.
When you are in your pre-approval stage, you have to undergo a documentation procedure where your income details are confirmed by the lender. As soon as this process is over, the you will get quick disbursement. This quickness allows you an easy and quick purchase of the property. In this way you will never miss out on any good purchase and deals.
In most cases, a pre-approved loan is an excellent option. It is advisable that you apply for a purchase only when you are fully sure. You should always investigate deals, meet two or three lenders, and choose the one which aptly fits your financial structure. Excessive inquiries may leave you confused and indecisive.
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