Buying a house is like a dream come true for many. However, this process isn’t as straightforward as it seems. Besides selecting the right property, one needs to ensure the availability of adequate funds at their disposal. One can also avail of a home loan from a reputed bank or non-banking financial institution to pay for the house in Equated Monthly Instalments (EMIs).
However, it’s never a good idea to start hunting for a home loan after finalising a property. This is because the approval for a fresh home loan from a lender may take a lot of time and effort. The lender may even deny the approval for a home loan if it finds any disparity during the verification process. And this may put the entire plans of a homebuyer on the back burner.
That is why it is recommended one should opt for a pre-approved loan. A pre-approved home loan makes it easier for a homebuyer to get quick finances whenever they wish to buy a house.
What is a pre-approved home loan?
A pre-approved home loan is a loan offer given to a borrower based on their eligibility, credit score, financial capability, and relationship with the lender. A pre-approved loan offer allows a homebuyer to access swift funds without going through the lengthy procedure of property verification and scrutinising the borrower’s profile.
With a pre-approved home loan, a homebuyer can access the requisite funds only after submitting the required property-related and KYC documents.
How to get pre-approved for a home loan?
One can apply for a home loan pre-approval if one plans to buy a house in the next few months. Generally, a pre-approved loan offer stands valid for three to six months, depending upon the lender’s discretion.
Even the home loan pre-approval process may vary from one lender to another. Here is a step-by-step guide on how to get pre-approved for a home loan with a lender:
Find the right lending institution
The first step in getting a home loan pre-approval is finding the right lending institution. Every homebuyer has different funding requirements. So, one must identify and select the right lender as per their borrowing requirements. For example, one can choose whether they want to apply for a home loan with a bank or an NBFC, which have more flexible terms and conditions.
Fill out a home loan application form
Next, a homebuyer needs to fill out a home loan application form with the chosen lender. This can be done offline or online by visiting the lender’s website. The best way is to apply for an online home loan approval from the convenience of one’s home or office. One can also get in touch with one of the lender’s representatives to know the process of getting a pre-approved loan offer.
Furnish the required personal information
The lender may ask for a range of personal information from the borrower to check their home loan eligibility. These may include their age, contact number, residential address, e-mail id, employment status, monthly income, and existing debt quantum. Based on this information, the lender will decide whether to provide a pre-approved loan offer to a borrower.
Check credit score
When a borrower submits their home loan pre-approval application, the lender checks their creditworthiness by pulling out their credit score. Usually, lenders consider a credit score of 750 or above satisfactory for providing pre-approval for a home loan. So, one should check their credit score and take steps to improve it if it is below the satisfactory mark.
Wait to get a pre-approved loan offer
After completing the steps mentioned above, one can wait to get their pre-approved loan offer from the lender. This could take anywhere between a few days to even a month. The offer will also mention the maximum loan amount a homebuyer can borrow and the applicable home loan interest rate.
Conclusion
Applying for a home loan pre-approval is a great way to ensure one doesn’t have to face unnecessary delays to get access to funds while buying a house. However, one needs to remember that a pre-approved home loan offer is valid only for authorized properties, and it comes with an expiry date. Also, the lender has every right to reject the home loan approval if it finds any discrepancy during the verification process. The final disbursement of the loan amount is at the sole discretion of the lending institution.
If you are looking for a luxury home in Mumbai, Piramal Realty is offering a fixed home loan rate of 6.85 per cent on all residential projects in the Mumbai Metropolitan Region that you can make the most of until 2024.
Disclaimer- This article is based on the information publicly available for general use as well as reference links mentioned herein. We do not claim any responsibility regarding the genuineness of the same. The information provided herein does not, and is not intended to, constitute legal advice; instead, it is for general informational purposes only. We expressly disclaim /disown any liability, which may arise due to any decision taken by any person/s basis the article hereof. Readers should obtain separate advice with respect to any particular information provided herein.
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