As per a report, nearly 67% of Indians are willing to take loans mostly to finance big-ticket purchases like buying a home or fulfilling diverse personal expenses. Several types of loan options are available in the Indian market, and choosing the right often becomes challenging for the borrowers. However, among many, mortgage loan options can be an excellent choice for individuals who are inclined towards secured funding. In this regard, one should first know what is a mortgage loan and how that can prove to be beneficial for them.
What is a pre-approved mortgage?
A mortgage loan is one of the secured advances that borrowers can avail by mortgaging any of their immovable assets like a residential or commercial property. It is also known as a loan against property, and one of the specialties of this loan is that borrowers can avail a loan amount of up to Rs.3.5 crore at an affordable EMI facility.
Moreover, a pre-approved mortgage loan facility is also extended to existing customers by select lenders. In this case, the lender assesses the property of the applicant and other eligibility and provides pre-approval of the loan amount on the basis of that assessment. It allows borrowers to gain an idea of how much credit they can borrow. Thus, it also helps them to assess their expenses accordingly so that they do not strain their monthly finances.
However, once borrowers know what a mortgage loan is based on eligibility; they can negotiate with the lender for the best possible deal.
What are the steps to follow for a pre-approved mortgage advance?
Now that more individuals are opting for loans, approval requires undergoing a set of formalities. However, with a pre-approved mortgage facility, the entire process of loan approval becomes easier and less time-consuming. With proper eligibility and process of application, this process is only simplified.
Following are some of the useful tips that aid you to understand what is a mortgage loan and how you should get approval for the same.
Start planning beforehand
If you are planning to make significant expenses, it will be better if you start planning for the same beforehand. For instance, if you are thinking of buying a home two years later, you should start researching early. It will allow you to gather valuable information and thus will help you to increase your eligibility by making timely adjustments to your credit profile like improving repayment capacity via proper measures.
Clear your existing debts
Financial advisers often stress upon maintaining a good credit history for a mortgage pre-approval. For that, you need to clear your outstanding debts like credit card debts, other loans, etc. before applying for one. With a high credit score, you will be able to negotiate with your preferred lender for better mortgage loan rates.
Maintain a decent bank balance
Most lenders for mortgage pre-approval ask for the bank statements of the last few months. Hence, if the willing borrowers can maintain a sound bank balance, the lender will be able to trust with their repayment capacity. Also, savings enable the borrowers to go for a higher down payment that can effectively reduce the burden of EMIs.
Cite all income sources
One of the convenient ways to assure the lenders about your loan repayment capacity is showing steady sources of income. Hence, it is advised that besides mentioning your net income, you should incorporate your other income sources as well, like rental income as well to get approved for a mortgage loan.
Keep all documents ready
Before opting for a mortgage advance, borrowers should learn about the list of documents needed to apply for a loan against property. The documentation is even more vital in case of mortgage loan options because borrowers also need to submit the certificate of property to be mortgaged to avail the loan.
Borrowers can also use any online mortgage loan EMI calculator to determine the EMIs, interest rates and other vital components of servicing a loan.
They also come with pre-approved loan offers that can simplify the loan approval process. It also helps save a considerable amount of time. Such an offer is available for several loans as well, such as home loans, loans against property, and so on. You can check your pre-approved offer instantly by providing your name and contact number.
Nonetheless, besides getting an insight into pre-approved mortgage advances, understanding the charges on your loan against property is equally essential for smooth repayment of the loan. Also, make sure to compare lenders before applying.