Pre-approved home loan can get you faster disbursal

Buying a home is one of the most important and emotional decisions in one’s lifetime. Equally important is to ensure that as a buyer you are able to avail the home loan from a reputed institution at a good rate of interest. Generally, homebuyers have many queries around which lending institution and other things. In such a scenario, the homebuyer should opt for pre-approved home loans as it will demystify all your queries.

Generally, a pre-approved loan is taken prior to the property selection. This is, however, done after a thorough examination of the credit worthiness of the borrower and the approved amount depends upon several factors.

While seeking a pre-approved home loan one should approach a reputed financial institution after doing extensive research. An important factor is to check the interest rate that the lender is providing for your home loan. However, if there is a change in the interest rate, the borrower will be charged the prevailing interest rate when the loan was taken. This pre-approved loan is valid for a particular period, which could vary from lender to lender, and generally valid for six months. In a pre-approved home loan, banks and financial institutions also provide a loan sanction letter stating that the borrower will be able to avail a loan up to a certain amount subject to meeting certain terms and conditions.

Advantages of availing pre-approved home loan is quite beneficial for home buyers who are planning to purchase a property in the near future.

Increased Certainty:

Getting a pre-approved loan helps the borrower get clarity in terms of eligibility and finances. A home loan sanction letter increases the confidence of a home buyer in exploring, shortlisting and owning a home.

Quicker loan disbursal: With a sanction letter, the customer completes the first step of the loan application process wherein the lender has already evaluated the income and credit history documents. After the borrower finalises the property, the lender can proceed to the second step of verifying the property documents, to accelerate the loan disbursal process.

HOME-SWEET-HOME

• A pre-approved loan is taken prior to the property selection
   
• Pre-approved loan is valid for a specific time, which could vary from lender to lender

The writer is  joint managing director and CEO, DHFL