Parameters considered before sanctioning a preapproved loan:
Before signing an in-principle approval for the loan, the bank checks on the following criteria before signing the loan.
•Employment status: whether the individual is salaried/self employed/entrepreneur
•Proof of identity and residence.
• Proof of remuneration that is salary slip in case the individual is salaried. In case of self employed individual, proof of income of his business is needed.
•Declaration of timely payment of income tax is also sought by the lender.
These factors along with many others stand crucial in undermining the repayment capacity of the prospective borrower and thus determining the final loan approval.
Benefits of preapproved home loans:
•The most important benefit of preapproved loans seems to be the psychological relief that it provides to the borrower by relieving him of dual burden of finding suitable property and at the same time arrange for adequate funds to acquire the same.
•Since these loans are also sanctioned after proper checking the repayment potential of the borrower, it makes the borrower additionally credible in the eyes of the real estate agent.