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The Advantages of a Pre-Approved Loan

The Advantages of a Pre-Approved Loan

Wrapping our heads around various financial aspects is a major part of navigating our independent lifestyles. It is important to have at least a basic understanding of them to avoid confusions while making crucial decisions like buying a home.

Buying a home always becomes a goal for many people at a very young age. Hence, it’s wise to manage income in a manner that maintains creditworthiness and bag a pre-approved home loan.

What is a pre-approved home loan?

It is a kind of fund borrowed before the selection of a property. During the pre-approval process, here are some of the things that are assessed:

• Income
• Creditworthiness
• Repayment capacity

Once the bank is sure of the above, the borrower is eligible to receive the loan.

Here are some benefits of pre-approved home loans:

• Home buyers are allowed more time and focus to look for properties and see which one fits the bill. With a generous amount of time, they can check out many things like:

 Configurations
 Homes that fit their budget brackets after the pre-approved loan eligibility
 Location
 Amenities

• Loan disbursal picks up speed as most of the verifications happens during the pre-approval phase. This enables homebuyers to finalize their payment on a property. All that would remain is the verification of the property documents. This is great for those with a shorter time limit to transact.

• Home buyers who have time to buy homes, gain the upper hand in negotiating with realtors/builders. With a knowledge of their pre-approved status, builders will be keen on selling homes and will heed their needs.

• Home buyers also gain a better understanding of their current financial status. After knowing how much they currently have, they can decide on how much down payment they can make. In that way, they can proceed to manage other expenses like hiring interior designers, lawyer fees etc.

Pre-approved home loans indeed help people in getting a head-start of their home-buying journeys. As long as homebuyers have well-organized financials and find the right time, purchasing a home will definitely be a dream that comes true.

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