Buying a home of choice is every person's dream. But for the common man, the path towards fulfillment of this dream is definitely not a cakewalk. The chase for a dream home is loaded with tension and burden. First burden consists of the need to search a suitable and apt property of choice and secondly comes the burden of arranging finance for buying the property.
A common problem usually faced by borrowers is that many times even after finding a property of choice, acquiring it becomes difficult because of inability to arrange for required funds in time. To free the home buyer from his woes, come preapproved home loan schemes.
With preapproved home loans fitting themselves in the lending space, the home buyer gets relieved of one burden with the fact that he now has funds in hand. All he needs is the property of choice. Preapproved home loans thus have come as a stress reliever for the home buyer.
Characteristics of preapproved home loans:
•These loans usually come with a processing fee. The amount of fees charged is kept at the discretion of the lender.
•Preapproved loans however come with a clause containing the time frame till which they are valid. Although the decision to decide the tenor of the loan is at the discretion of the lender, most of them keep it at 6 months frame.
In case the property is not finalized by the borrower within this time, then the loan scheme ends and the borrower have to apply for a fresh preapproved loan scheme all over again.
•Also there is no preset interest rate for the loan. Interest rate on the loan will be set depending on the prevailing rates in the market at the time when the property has been finalized and the loan duly sanctioned.
There is no procedure whereby the interest rate can be locked in during sanctioning of the preapproved home loan.
•Getting an in-principle approval signed for the loan does not imply that the lender would finally grant the loan. The lender first undertakes a due diligence test on the property and once the property has been checked OK by the lender, only then does the loan gets finally approved.