If you own a residential or commercial property, you can get a loan by pledging this property as collateral. This is called a mortgage loan. Just like pre-approved home loans, lenders are also offering pre-approved mortgage loans. Thanks to pre-approved mortgage loans, borrowers can get access to funds quickly.
A pre-approved mortgage loan requires minimal paperwork and would be disbursed seamlessly. To ensure that one qualifies for a pre-approved mortgage loan, the following steps can be taken carefully.
9 Steps to Get Pre-Approval for a Mortgage Loan
- Determine the budget:
Firstly, you could use a mortgage loan calculator to figure out the pre-approved mortgage loan that you qualify for. Most lenders offer such types of EMI calculators which would also help you determine the estimated EMI amount you have to be paid. This would also help you determine the budget for purchasing a new property which can’t harm your pocket.
- Maintain a healthy credit score:
One of the methods through which one can obtain a pre-approved home loan or mortgage loan is by maintaining a healthy and good credit score. If you have ongoing loans, ensure that you repay your EMIs on time and avoid defaulting on EMIs. A healthy credit score improves your chances of getting a higher pre approved loan amount at attractive interest rates and also help to avail different offers provided by the lenders.
- Ensure that your property is authorized:
A pre-approved loan is only available for eligible properties. One must ensure that the property or home one is looking at is eligible and authorized by lending companies. Authorization is based on the documents submitted by the property developer and would play a role in the mortgage loan EMI calculator as well.
- Finalize the rate of the loan:
A pre-approved loan may be available from a variety of lenders if one’s credit score is robust. Based on the availability of the pre-approved loan as well as the tenure of the loan, one should finalize the rate of the loan that one is willing to take upon. This would ensure that the disbursal and final process are completed quickly.
- Check the approval period of the loan:
A pre-approved loan is a specific offer that is extended to a customer by a lending institution. A borrower must verify the duration during which the offer is available and decide within that period.
- Complete the mortgage application:
A pre-approved loan does not absolve a person from the process of obtaining a loan or mortgage. An individual must submit and process all the regulatory requirements for obtaining a mortgage for their house. An individual should ideally try to complete the loan application process before the period of approval for a pre-approved loan expires. A complete fulfill mortgage loan application helps to gets the pre-approval for a mortgage loan.
- The verification process:
The verification process happens at the end of the lender wherein rigorous and thorough checking of the property, related documents, credit history, and track record is undertaken before final approval of the mortgage loan. This may include verification of the documents of the borrower including income proof, past track record, as well as the valuation of the house for obtaining a mortgage.
- House Appraisal:
Although a pre-approved loan is only available for properties that are authorized by the lender, a final appraisal with regards to the house or property will be conducted by the mortgage provided. This would include various checks and appraisal of the valuation of the house as well. In the case of an under-construction property, the progress of the construction of the property is likely to be verified and the payments will be advanced as per the construction completion.
- Complete your purchase:
The final step in obtaining a pre-approved mortgage loan or home loan is availing and completing the purchase of your dream home. This would include registration of the mortgage and completion of all legal formalities including transfer of the title of the property, stating the encumbrance of the property as well as payment of all legal charges. A pre-approved mortgage loan would allow one to quicken the process of completion of the purchase of the house due to a decrease in credit checks.
Additional Read: How To Get The Best Rate On Mortgage Loans?
A pre-approved home loan would allow an individual to achieve the dream of owning a house or property in a slightly quicker time frame than normal. Any individual can get a pre-approved loan offer from a financial institution provided that they have a proper past track record, complete paper, documents and good credit history. Contrary to the belief, a pre-approved loan can also be rejected at a later date before completion of the process if it is found out that any of the documents were lacking or the credit score was not proper. A pre-approved mortgage would only make the process simpler and allow an individual to achieve their dream sooner.