Home Loans have emerged as the most reasonable funding option for home buyers. Buyers from both the salaried class and the business class (who have filed IT Returns in the last five years) are eligible for home loans, making it easy for anyone to buy a home.
The home loan is typically availed when one has decided on their dream home or perfect property. The process can then throw up several surprises about the eligible amount, depending on the buyer’s profile, desired amount, presence of a co-applicant or not. At times, the buyer may have to reconsider his/her options and look at a lesser priced property, creating a slight emotional setback.
One way of avoiding such an eventuality is to have a pre-approved bank loan ready and then go scouting for the best property option. Pre-approval involves a pre-qualification process wherein the lending bank analyzes all the data related to your past and present debts (by looking at your bank statements and your CRISIL or credit worthiness report), your repayment track record, your credit card statements, sources of income, salary slips (or bank account statement in case of businesses) and IT returns for three or more years.
These data is run through a software that derives the loan eligibility amount. The same is mentioned in a pre-approval letter that is given to you. The letter states that you can avail the loan whenever you desire. With this in hand, you can choose your property options after factoring the down payment you must make.
The most important advantage of pre-approving your home loan is that it saves you enormous time during purchase. This gives you enough time to examine similar options without being rushed by the seller. That is why pre-approval is becoming very popular with younger buyers.