The purchase of a home is a dream come true for many of us. However, the biggest problem in purchasing our dream home is arranging for the finances required for it. This is where home loans come into the picture. The process of availing a home loan has always been tedious and time-consuming, but not anymore. With pre-approved home loans, one can now skip the long-drawn-out waiting game and avail funds much faster and easier.
What is a pre-approved home loan?
A pre-approved home loan is a type of loan that has already been sanctioned to a borrower by a bank or a financial institution. In simpler terms, it means that the borrower has fulfilled all the eligibility criteria set by the lender and has been approved for a home loan even before he or she applies for it. This is based on the credit history, repayment track record, income details, and employment status of the borrower.
Advantages of pre-approved home loans
Quick and convenient process
The biggest advantage of pre-approved home loans is that the loan is approved much faster than regular home loans. The waiting period of days, or even weeks in some cases is cut down to just a few hours or days. This makes the process much more convenient and hassle-free for borrowers.
Guaranteed loan
A pre-approved home loan is a guarantee that the borrower will get the loan for the amount and tenure sanctioned by the lender. This gives the borrower a sense of security and helps in planning the finances accordingly.
Saves time and effort
With a pre-approved home loan, the borrower need not go through the hectic process of researching and comparing various loan options and their terms and conditions. The lender has already done that, and the borrower can simply choose to accept the loan.
Faster disbursement
As the loan is pre-approved, the lender already has all the necessary documents and details of the borrower. Hence, the disbursement of the loan amount can be done much faster.
Lower rates of interest
The interest rate on pre approved home loan is usually lower than regular home loans. This is because the lender has already assessed the creditworthiness of the borrower and is confident of his or her ability to repay the loan.
Pre-approved home loans have revolutionised the home loan industry by making the loan process quicker and easier for borrowers. It saves time, effort, and offers a sense of security to the borrower. However, it is important to note that the borrower still needs to make wise and practical decisions and ensure timely repayments. Nevertheless, a pre-approved home loan is a great option for borrowers who want to save time, avail lower rates of interest, and want the financial backing to negotiate a better deal.
