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31 December 2010

Preapproval and Home loans-Narrow your search

Home loan preapproval is very advantageous to the buyer as they can narrow down their search for a home according to their budget. These statements from the banks understand our financial status and how much amount can be available as down payment as well as how much the borrower can afford to pay as monthly EMI.
Going for house hunting is a tedious process as there are plenty or options available. It may so happen that you may select a certain house but it may be out of the reach of your budget. This amounts to wastage of a lot of time and effort. Even your housing agents that offer lists will be de-motivated to show you many places. It is best to fist estimate your financial standing and how much capacity is there for the loan repayment. Here this loan which is preapproved by a bank helps. They undergo certain tedious procedures to jot down your financial assets. Liabilities and bottom line is how much amount you can shell out every month to repay the amount for the new home.
They will send agents who will check all the documents and the proofs of your securities. Your bank statements and all your financial assets available as ownership will also be examined. Their estimated value will then be calculated and they will come up with a certain figure which the bank or lending institution can offer as loan. This amount is pre-decided and helps the purchaser to select homes only under this range. You can also ask your housing agent to only show you offers within your budget. This will save lots of time and resources on your part as well as the agent’s part.
However it is required to be kept in mind that a preapproval letter from the bank is not an assured letter and bank or lender can change rules and stop the processing of loan amount at their own will.
All the Best from Rizwana!
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