How To Pre Approve For A House Loan A Step By Step Guide
Financing your dream home is the most important aspect of the buying process. If you are planning to take a home loan, getting pre-approved for the loan can act as a boon to the whole process. With the right planning and methodical execution, pre-approving can be easily taken care of. By following this step-by-step home-loan guide you can be assured of getting your pre-approval and well on the way to getting your dream home.
A pre-approved home loan is a privilege extended by a lender to a borrower based on their eligibility, credit score, financial capability, and relationship with the lender. This facility allows the borrower to get loan approvals faster without going through the lengthy procedures involved.
Evaluate Your Financial Status
Evaluate your monthly income, expenses, any existing loans, and financial obligations. Having done this, you will get an estimate of your financial stability and ability to pay for the loan.
Research Mortgage Lenders
You will need to find a reputable lender with the right plan that meets your requirement. This will require you to do research and evaluate all the offers by reputable lenders in the market. You can use the reviews given by other borrowers to find a lender with the best customer service and competitive interest rates.
This is an important process in the application for pre-approval. The important documents required by the lenders are:
1. Proof of Income – Pay slips and income tax returns for specific periods
2. Proof of Identity
3. Bank Statements
4. Credit History or Credit Score
5. Employment Verification
The lender should now be contacted to complete the application process. The pre-approval application form is to be filled out by providing personal information, employment details, income information, and property details that are being purchased. The documents that provide proof of the information as also attached to the application.
Credit Check and Evaluation
The application will go through an evaluation process. The lender will do the appropriate checks and evaluate the credit score of your application before making the offer. After considering all the factors the details of the credit that can be extended are calculated.
If the application is successful, the lender will issue a pre-approval letter. The letter will have the details of the credit limit, tenure, and interest rates that have been approved for your application based on the information received. You can evaluate the offer and understand the terms and conditions properly.
Although you have the pre-approval letter it might not guarantee you the loan. After choosing the property you want the lender may approve or disapprove the loan based on their evaluation of the property in question. These pre-approval home loan tips will ease the process to a great extent improving the chances of getting your home loan.
Once you have shortlisted the lender you can contact them.