A pre-approved home loan offer is a mortgage option that has already received preliminary approval before the borrower may conclude the purchase of the property. The procedure is the same as getting a standard loan approved, except you can receive the offer before choosing a house.
This method can have several advantages for prospective homeowners, including setting realistic expectations, speeding up the transaction, giving them more negotiating leverage, and shielding them from dishonest lenders. IPS Cambodia is the most reliable real estate agency to help you find the finest properties in Phnom Penh.
We will go over these advantages in greater detail in this post and explain why pre-approval is a valuable resource for anyone buying real estate in Phnom Penh.
Benefits Of Pre-Approval For A Real Estate Loan In Phnom Penh
Potential homebuyers in Phnom Penh may profit from pre-approval home loans in several ways, such as:
A Stronger Negotiating Position With The Lender
A pre-approved home loan will offer you the leverage to bargain with the lender because the bank has already authorised your house loan.
- Negotiating is simple in this situation because the bank will take your offer seriously if you have a sanction letter.
- Additionally, you can already be presented with competitive interest rates before you even haggle with the lender.
- This is so that the bank may be confident in your ability to pay them back and convert their inquiries into actual sales rather than just generic inquiries. You can choose the loan’s payback period, which results in EMIs that are affordable in addition to the low-interest rates.
Loan Processing Becomes Quick And Simple
Pre-approval home loan applications are processed more quickly and efficiently than standard ones. The loan disbursement process is simple and rapid because the lender has previously validated the borrower’s income documentation during the pre-approval stage.
Property document verification and other legalities are the only processes left before the loan is disbursed. The sanctioned loan amount is distributed as soon as these documents are confirmed.
Effective Property Search
Being unable to get closer to the house you want to buy is the worst feeling. However, a borrower is better positioned to look for a suitable house with a pre-approved loan as you know your budget.
Better Financial Planning
When you apply for a house loan, you frequently are unsure of your eligibility and occasionally have your application rejected.
You increase your chances of having your application rejected by doing this. The pre-approved mortgage, however, forces you to make the necessary financial plans. You will limit the property’s possibilities according to how well you understand your eligibility.
It helps you save time and effort on an inspection of a property that was too expensive.
Documents Required For Applying For Home Loan
You would require the following document to apply for a pre-approval Home Loan.
- Photo identification:
- Legitimate passport for foreigners
- Passport or National Identity Card for citizens of Cambodia
- Proof of the home’s current address
- Family Book or Marriage certificate
- Proof of personal bank statements and income documents
- Duplicate of any Hard Title deeds being utilized as a collateral
- Letter of intent pertaining to the purchase of the property or a Sales Purchase Agreement.
Things To Consider When Applying For a Home Loan
Loan Limitations
The loan amount is determined by your income potential and capacity to take out a loan to buy the home of your dreams. Loan eligibility varies from person to person.
Typically, banks only permit you to borrow 70% of the total value of the property. Depending on your financial situation and capacity, different lenders can offer you various loan packages.
Legal Documents:
You must determine what paperwork and information you must gather before applying for a house loan.
A series of legal documents, including collateral equal to the loan amount, a letter confirming your wage, a valid identification card, and the names of your guarantors, are required to obtain a house loan from the bank.
The bank will consider your access to capital, collateral, character, and other factors demonstrating your capacity to repay the loan.
Repayment Term:
Your payments will change depending on the loan’s terms and interest rate. Banks often provide three options for house loan repayment: 3-month interest payments upfront, fixed principal payments, and variable principal payments are the other options. Be sure to fully grasp your alternatives before committing to any terms.
Loan Processing:
Processing a loan application can take a long time, and the borrower must provide a tonne of paperwork and supporting evidence. The bank will run a pre-qualification check when you apply for a house loan. Once it determines that you are qualified, you must decide which loan programme and interest rate are ideal for you.
The loan procedure begins as soon as the bank receives the loan application. And the loan approval request is sent with the underwriting paperwork. The documentation is sent to the closing and financing department after the loan has been approved, where the borrower will sign it.
Conclusion
A pre-sanctioned offer is frequently the best choice when relying on a loan to purchase a home. The main benefit, among many others, is that you are more aware of your spending cap and home loan eligibility. In doing so, you increase your chances of getting your house in the current market conditions and establish yourself as a respectable buyer with whom any seller will take seriously and consider making a deal.
You can contact IPS Cambodia for the best real estate properties. They have the most skilled real estate agents who can help you find what you are looking for in your budget in Phnom Penh.
