Looking to buy a home? Here is how pre-approved home loan will benefit you
A pre-approved home loan has various benefits like bargaining with the developer, negotiation with the bank, etc.
"Dear customers, you are our valued customers and we are happy to inform you that you are eligible for a pre-approved home loan." If you are getting such messages from your bank, then don't delete, especially if you are planning to buy your dream home. You should know that having a pre-approved home loan has various benefits like bargaining with the developer, negotiation with the bank, etc. Apart from this, better financial planning, effective property search, etc. are some added advantages of having pre-approved home loans.
Speaking on the benefit of pre-approved home loan, Pankaj Mathpal, Managing Director at Optima Money Managers said, "Having a pre-approved home loan enhances the negotiating ability of the homebuyers because having a pre-approved home loan letter in hand means a serious home buyer. In that case, the buyer can get a better deal from the developer as he won't like the buyer to slip from its project to another developer's project."
Pankaj Mathpal said that pre-approved home loan makes the loan processing much easier. "The application for a pre-approved home loan is faster and simpler than a regular home loan. Since at the pre-approval stage, the lender has already verified the income documents of the borrower, the process of loan dispersal becomes easy and quick. The only process left before loan disbursal is the property document verification and other legalities. As soon as these documents are verified, the sanctioned loan amount is disbursed," said Mathpal.
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On how pre-approved home loan helps getting a competitive home loan interest rate from the bank, Jitendra Solanki, a SEBI registered tax and investment expert said, "Considering the fact that your home loan has already been approved by the bank, this will give you the power to negotiate with the lender. Negotiating becomes easy here because with a sanction letter in hand the bank is taking you seriously for the purchase. Also, even before you negotiate with the lender, you might already be offered competitive interest rates." He said that with a pre-approved loan, a borrower is in a better position to search for a suitable property as you are aware of your budget.
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