To help readers keep pace with what’s happening in the real estate sector, Mint’s Q&A appears every other Monday.
I have had a savings account with a bank for close to a decade. When I approached the bank, it informed me that I had a pre-approved home loan. What does that mean? How will it benefit me?
A pre-approved home loan refers to the bank granting in-principle approval to home loan borrowers who have not identified a property yet. This is, however, done after a thorough examination of the creditworthiness of borrowers and the approved amount depends upon several factors, including age, income, savings history and credit score.
A pre-approved home loan helps a customer plan the purchase of the property. Since the customer knows the funds available to him, he can buy a property in keeping with his budget. It makes the entire experience of owning a house hassle-free and expeditious.
However, there is an expiry date, with the approved loan amount valid for a particular period—it is six months at HDFC. In case the customer approaches us after six months, we do a reassessment of his eligibility. This way, he could get a higher loan amount as well, in case his income has risen during that period.
One point to be noted is that the lender would disburse the loan only after the property documents are verified and they meet the lender’s approval criteria.
I am currently working in Mumbai. However, my roots are in Vadodara and I would eventually like to settle down there. Your website indicates that you have a property services division. Would you be able to help me find a property of my choice in Vadodara?
Since property purchase is the single largest investment for most individuals, it is essential for the customer to understand the various nuances of property purchase so that he makes an informed decision.
You could also take advantage of our division, HDFC Realty, which consists of a team of real estate professionals who specialize in facilitating the buying, selling or leasing of residential and commercial property in India.
Renu Sud Karnad is joint managing director, HDFC
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