I am 47 years married. I will soon book an apartment with a reputed builder and have arranged the down payment. I want to avail a home loan for the rest of the amount. My friend has advised me to take a pre-approved home loan to avoid problems if my home loan gets rejected. Should I avail a pre-approved home loan? Are there any problems if I take a pre-approved home loan?
Pre-approved home loan is a written guarantee by the bank that you have secured the home loan. Loan officers of the bank will check your salary/income details, credit history and all other checks just as in a home loan, except property title check as you have not finalized the property. The bank sanctions the amount depending on your eligibility. The pre-approved home loan has a validity of around 6 months, within which you must finalize the property. Try to get a pre-approved home loan from a bank where you have SB account/ Fixed Deposit. Pre-approved home loan is very good as banks give you loans depending on repaying ability. This gives you an idea of the budget, when you search for an apartment. Builders could give discounts as they are sure, you are a serious buyer. You have money at your disposal and can easily select a house/property. There are some problems like the pre-approved home loan is available only for a certain time period, within which you must shortlist the property. If you don’t finalize the property within the time frame, you would have to apply again and pay processing fees twice. If the bank does not find the property title satisfactory, it might withdraw the pre-approved loan earlier approved.