What’s a Pre-Approved Home Loan? What are its Advantages?
March 23, 2018
Obtaining a home loan is not an easy process. First, you have to find the best deals available, then apply at the various banks, and then wait for days or weeks, and even then, the process isn’t finished. There are many formalities and paperwork to get over with afterwards unless you have a pre-approved home loan that is.
What’s a Pre-Approved Home Loan?
As the name suggests, a pre-approved home loan is a home loan that has already got a seal of approval. In other words, if it’s been offered to you, then you don’t have to apply at the bank and await their “nod”. You can directly apply for the loan and get the funds disbursed to you through a fast-track route.
How Does a Pre-Approved Home Loan Work?
The lenders offer pre-approved home loans to select individuals on the basis of their credit history and credit score from time to time. If you qualify and receive the offer, then you get a limited time to apply for the loan with an eligible property.
What are the Advantages of Pre-Approved Home loans?
There are many benefits of a pre-approved home loan over a standard home loan:
With a pre-approved home loan, you have a clear idea of how much amount you have with you to invest. Thus, you can give your full attention to the property-searching part.
Better Negotiation with Sellers
When you have a pre-approved home loan, it’s easier to gain the confidence of a property seller. They are more likely to believe that you are a serious buyer as the funds are already in place. You can leverage this to get a better discount.
There is minimum paperwork on pre-approved loans. In fact, during the initial stage, your income documents are analyzed. Before the funds are disbursed, the property documents are checked. Since the credit assessment process, which is one of the most time-consuming steps is already been taken care of, the overall disbursal is quicker.