From the outside, buying an apartment might seem like an uncomplicated exchange of money and apartment keys, but it is more tedious than you imagine. It is amongst the many complex processes adults find themselves dealing with. The thought of owning your own home is an exciting one. However, it comes with a cost. Frankly, the cost comes across as unimaginable to the common man.
Real estate prices have sharply increased in the past few years. Just when you think it could not get pricier, it surprises you by touching the skies. Sometimes, buying an apartment in Chennai might seem like an unrealistic dream that is unattainable by a commoner. Yet, real estate never goes out of business. Inflation, deflation, demonetization are just fancy words in regard to the number of flats being sold every day in Chennai. So how do so many afford an apartment in the city?
The answer is obvious: a home loan. Now, getting a home loan isn’t exactly a walk in the park. You cannot blame banks for being so strict, can you? Lending lakhs of money to strangers should involve a bit of caution. Although the process is stringent and stressful, here is something that can make the process easier. Pre-Approved Home Loan is a ray of hope in the dark world of bank loans, debt and financial constraints.
Here is what you need to know about Pre- Approved Home Loans:
A pre-approved home loan is the evaluation of the borrower’s financial profile to decide how much money can be allocated to them. This involves checking their credit history and CIBIL reports to trace their financial footprint and gauge if they are eligible for obtaining the loan.
A number of documents like your Income proof, salary slips, PAN cards, ID proof and Income Tax returns should be filed to prove your creditworthiness. Some banks charge a fee for pre- approval but refund the fee amount after the loan is approved. However, the pre-approved loan comes with an expiry date. It is valid only for 6 months or so. Re-application is required if you want to take a loan after six months. In addition, the pre- approval loan is not an all-pass card. If your property documents have any legal complications/ loopholes, the approval can be taken back.
Does it seem like pre-approval loans are a lot of work and no benefit? This is where you are wrong, here are some pointers that are going to make you run to the nearest bank and get yourself a pre-approved loan.
- Narrows down your search: How many of us have found the perfect home, imagined living there, thought of the perfect curtains for the living room only to fail at getting a massive loan? Save this heartbreak with a pre-approved loan, as it gives you a clear idea of how much loan will actually be allocated. This way, you will not overreach or underestimate how much you can afford. This will make your search for the perfect home easy and efficient.
- Save precious time: Pre- approved loans give you the exact budget you have to work with. In correlation with the previous point, pre-approved loans help you save a lot of time by not looking at apartments that do not fall within your budget.
- Credibility: This approval will make your real estate agent understand that you are serious about buying the apartment. Every day, thousands of people enquire about a house but the conversion rate is alarmingly low. Therefore, pre-approval makes you a real contender and the builder is more likely to make the process smooth!
- Bargain ability: As your credibility increases, you will have the upper hand in a bargain with your builder. A pre-approved loan shows that you have a certain amount assured and will help you strike a better deal with the builder.
- Faster disbursal of Loan: The last thing you want is missing a great apartment because of a delay in loan approval. When you have already shown your credibility in the pre-approval process, the actual processing of loan takes place at a much faster pace.
- Alleviate the entire process: With important tasks like document collection, submission, and approval out of the way, you can concentrate on other aspects of home buying.
- Lower Loan processing fee: Some banks have the habit of reducing the loan-processing fee if you happen to have a pre-approved loan.
With all the hype about which builder is the best, which one is the cheapest and daydreaming about how your dream house is going to shape up, a crucial aspect is often forgotten. Planning your finance is the most important piece of this puzzle and make sure you take the help of pre-approved loans to safeguard your sanity.