Pre approved Home Loans – Should you take it ?, The article mainly talks about the pros and cons of taking the home loan before actually purchasing the house or the property and not after finalising the property. This type of loans is beneficial for those, who are facing critical financial crisis and they are in need of the money for taking the property. All the details related to the pre-approved home loans have been mentioned here.
What are Pre approved home loans ?
The pre-approved home loans are basically the loans which are disbursed by the banks before actually the property is purchased. These types of loans are being given by the banks to relieve the people from the stress of financial burden. There are mainly two types of Home loan. One which can be taken after the property purchase and other one can be taken before any property is purchased. So the former one is known as pre-approved home loans.
Why you should take Pre approved Home Loans ?
There are some of the advantages, which would tend you to take the pre-approved as the procedure is mostly similar to that of the regular home loans. But the advantages they offer are different. We would see one by one benefits they offer:
- Less Interest – There can be chances of less interest rate, as there would be much time available to consult as many consults as you can, which would help you to negotiate the rate of interest. As in the normal and regular loan, the time period is very less and the borrower needs to get the funds as early as possible, where you won’t be able to communicate to many of the bankers.
- No Mental pressure – As the funds has been made available for the purchase of the house, there won’t be any mental pressure to get the funds. You would be financially stable also to get to the research of many properties which you would like to purchase.
- Time Savings – The best advantage of these types of loans is that the time taken for the closing of the transaction comes down drastically. As you are already having the funds in your hand, you need to directly approach the seller and take the possession of the same.
- Less Bank interference – In the normal bank sanctioning, the banks takes lot of time and lot of papers and documents to be given and not only that but also the bank would analyse the same data and than decide whether the person is in capacity of repaying the loan or not.
- Negotiate with the seller – As there is money in the hands, the person can negotiate with ‘n’ number of seller of the property to get that. The funds are available with you, so you can easily negotiate with the seller to give some discount as you are paying the same instantly.
Why you should not take Pre approved Home Loans ?
There are some exceptions also to the above scheme. They are as follows:
- There is a specific cost involved while you want this type of loan, it may be termed as pre-approval processing charges which are normally different for different person but ranges between Rs. 5,000 to Rs. 20,000. So these extra charges may become burdensome.
- The time periods for which these loans are available are very less, around 6 months, i.e. you need to purchase the property within 6 months of the loan disbursement. It would be beneficial only if the property would be purchased within few months.
Looking on to the benefits of these loans, it is satisfactory to purchase the pre-approved loans in comparison to regular home loans as they offered varied benefits.