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Why you should take a pre approved home loan?

 Why you should take a pre approved home loan?
If you have identified a property and decide to go in for a home loan and if the home loan is rejected for some reason, chances are that you could end up losing the property you want to buy. It's therefore prudent and makes sense to go in for a pre approved home loan.

What does a pre approved home loan actually involve?

A pre approved home loan helps you to get a loan approved in advance with the housing finance company or bank checking all parameters including your credit history, loan eligibility amount, employer details and finally approving a home loan, in advance. The housing finance company or the bank as the case may be will issue you a pre-approved loan certificate.

However, there is a validity for the loan that is approved for a period of six months. This means that you have to identify the property within a period of six months, or else the pre approved home loan stands null and void and you would lose the processing fees paid.


Quick loan disbursal

A quick loan disbursal is possible and should you be buying a ready property, it could be immensely helpful.

Ability to negotiate

A pre approved home loan makes you a serious buyer and improves your chances of negotiation with prospective sellers.


Most banks do take a pre approval home loan charge and do refund it once you have availed of a home loan.

It's important to note that though you may have a home loan approved, it does not compel the bank or the housing finance company to lend. A lot would depend on the property documents that would undergo verification.

Should you opt for it?

It's definitely advantageous to go in for a pre approved home loan, provided you ensure that you can identify a property within a period of six months. If you are unable to do so, you are likely to lose the amount you have paid by way of processing fees.

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