To help readers keep pace with what’s happening in the real estate sector,Mint’s Q&A appears every other Monday.
I work as an executive in a well-known consumer goods company in New Delhi. In May, I had approached a housing finance company to check how much home loan I would get. They evaluated my case and approved a loan of around Rs45 lakh. At that time I had not finalized which property I would buy, which I had clearly communicated to them. But now I have selected the property and will be buying a 1 BHK flat by mid-November. I hope I will not be required to go through the approval process all over again. Will the loan approved in May still be applicable to me?
A pre-approved home loan refers to the lender granting an in-principal approval to home loan borrowers who may or may not have identified a property yet. This is, however, done after a thorough examination of the credit worthiness of the borrowers and the approved amount depends upon several factors including age, income, savings history, credit score, etc.
However, the loan approval is valid for a particular period, which could vary from lender to lender, generally around six months. If you approach your lender at this point, you do not have to go through the entire process again but you may have to submit a copy of your latest salary slip just for the purpose of reconfirmation of your eligibility. The idea behind this is to only ensure that the customer is able to repay the loan comfortably.
Another crucial point, which you should, however, note is that the lender would disburse the loan only after verifying the property documents and that they meet the approval criteria.
A bank checked my income documents and has approved a loan of Rs40 lakh about three weeks ago. In the following week, it has sent a sanction letter to me specifying the amount. I contacted the loan appraiser specified in the letter and confirmed that I want only Rs20 lakh as the rest I could manage from my own sources. The bank has completed the legal and technical appraisal but I have not taken the disbursement yet. Though I had said that I want only Rs20 lakh, I would need additional Rs4 lakh due to a medical emergency in the family. Is it possible to increase the loan amount to Rs24 lakh now?
You could place a request for increase in your loan amount and generally there should be no problem in getting the additional Rs4 lakh.
Renu Sud Karnad is joint managing director, HDFC. Readers may write in with their queries and comments to firstname.lastname@example.org