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Why Pre-approval of loan is the key for home buyers in 2022

Owning a house that one can call a home is every individual’s desire. However, with the property prices soaring, owning flats in Mumbai will be a distant dream if you don’t have sufficient funds at your disposal. Most homebuyers opt for applying for the home loan from a reputed bank or other financial institution to ensure you get the right perspective to the budget and price range to house hunt for.

You may have heard that it’s important to get pre-approved for a loan at the beginning of the homebuying process. What does that really mean, and why is it so important? Especially, with increasing home prices and high buyer competition in today’s market for a 3 BHK 4 BHK and 5 BHK flats in south Mumbai. It’s crucial to have a pre-approved letter before making an offer. Here’s why.
• Preapproval from the lender helps you gauge your actual price range and how much you can borrow as a loan.
• A preapproval letter shows the seller that the buyer is qualified . It validates as a serious and potential purchaser.
• It helps in being well acquainted with the process before the actual opportunity materializes.
• When you are pre-approved, processing and finally approving the home loan amount will be a faster process.
A well-known realtor explains:
“By having a pre-approval letter from your lender, you’re telling the seller that you’re a serious buyer, and you’ve been pre-approved for a loan by your lender for a specific amount. In a true bidding war for 3 BHK 4 BHK and 5 BHK flats in south Mumbai, your offer will likely let go if you don’t already have one.”

Benefits of pre-approved home loan Quick loan disbursal: If you are an existing customer of the bank or NBFC, the pre-approved loan will be disbursed directly to your account in a very short time.

Minimum documentation: Instant loans are easy to obtain; the processes are considered hassle-free because it doesn’t require heavy documentation for loan approval.

No collateral or security required: The pre-approved loan customers need not provide any security or collateral to obtain instant loans.

Varying loan amounts: The pre-approved loan amount varies for every individual. The loan amount depends on the customer’s credit history and repayment record.

Repayment facility: You have to repay pre-approved loans in Equated Monthly Instalments (EMIs). Those customers who have an existing account with the bank (lender), can opt for auto-debit facility to pay the EMIs. The standard repayment tenure is 12 to 60 months.

Fees and charges: Lenders levy certain fees on customers during and after the disbursal of pre-approved loans, such as processing fees, secure fee, EMI bounce charges, outstation collection charges, penal interest, foreclosure charges, etc. The terms and conditions of the applicable fees and charges differ with lenders.

The changing markets and rising competition among buyers for 3 BHK and 4 BHk Flats in South Mumbai will need every step taken to be an advantage as a buyer. Since the lending institutions regularly updating their standards, one needs guidance to navigate these waters, so it’s important to have a team of professionals such as a loan officer and a trusted real estate advisor making sure you take the right guidance and how your qualifications as a buyer when you find a home to purchase.

In a competitive market with the choicest 3 BHK and 4 Bhk Flats In South Mumbai being available, a preapproval letter is a game-changing piece of the homebuying process. Not only does being pre-approved bring clarity to your homebuying budget, but it shows sellers how serious you are about purchasing a home.

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