How Long Is An "In Principle Home Loan Approval" Valid?

For those looking at home loans, the best option is to getting an "in principle home loan" approval. This is because it saves you time of getting an approval after you have identified and negotiated for a property.

Advantages of an in principle home loan sanction:

a) Allows better negotiations

This allows better negotiations with the builder since you now are likely to get a home loan, subject to submitting the relevant documents.

b) Perfect estimates of budget

Since you now know the amount of loan that will be sanctioned, you are better prepared in terms of your budget.

c) Hassle free running around

It might prevent running around at a later stage, though you still need to arrange for the documents.

How long does an in principle home loan hold good?

It might really varry from bank to bank. For example, India's largest lender the State Bank of India, has an in principle home loan that is valid for just three months.

What this means is that you should be able to identify the property quickly and seal a deal. Otherwise what could happen is that the in principle approval stands void. You would have to get an approval all over again.

Does in principle home loan approval guarantee a home loan?

An in principle home loan does not guarantee a home loan approval. In fact, you have to finish submitting the documents and stuff, before the final approval.

The bank gives you an approval basically on the basis of your salary, credit rating and other criteria.

But, say the bank starts vetting the documents and realizes the title of the builder is not clear. In this case the bank will certainly not disburse the loan. What this is means that an in principle home loan approval does not mean the loan amount would be given to the builder.

How long does it take for a pre approved home loan?

It really varies from banks to banks. These days banks check your eligibility after you apply online. Thereafter there would be a pre approved home loan. Most of the times, there are advertisements that talk of an instant home loan approval.

You need to be careful and read the clauses that are mentioned below. That is very much important.

In any case, it is not a big deal if the time period of the pre approved home loan expires. You can in any case, apply for the loan all over again. You need to be very careful when selecting a home rather than trying to do things too quickly, just because there is a pre-approved home loan in place.

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