Getting a home loan is always a tedious task, looking at the various documents that are required. Many individuals, going for a home loan can first get their home loan approved, even while looking for their dream house.
1) You know the amount that will be sanctioned
The one advantage of taking a pre-approved home loan is that you know the maximum amount that would be sanctioned. What this means is that you can plan the buying of your house along the lines of the loan. Say for example, if your loan amount sanctioned is Rs 40 lakhs, then you know you would have to look at a budget of around Rs 50 lakhs, given the fact that the loan amount sanctioned would be around 80 per cent of the property value. This leaves you with clear budgeting for the future.
2) Allows you greater bargaining ability
When you negotiate with a buyer, you could well show them the pre-approved home loan letter. This would make them realize that you are a serious buyer and hence your ability to negotiate is even better. You may well end-up saving a little bit more then usual.
3) Allows you to pay immediately
In case there is a desperate seller, who is looking for disbursal quickly, your pre-approved home loan may help. This is because, it would take lesser time to process the application and hence, if the sellers documentation is clear, you could make payment easily. This would ensure that you do not lose out on buying at attractive valuation of a distress sale.
4) Important procedures completed
Most of the important procedure are completed, when you go in for a pre-approved home loan. This is because your salary has been verified, so has your credit score and other details.
It is always a good idea to go in for a pre-approved home loan. This would save you time and help you to negotiate better. It would also be a relief as most of the work has been done.