What is Home Loan Pre-Qualification and Why Should I Get It?
Pre-qualification for home loans is not something you will always need to look into. Not every vendor will require you to do it. However, whether they ask for it or not, pre-qualified home loaners tend to save a huge amount of time when it comes to the processing of their loan application.
Why is this, you ask? Here, let us explain!
Before that, check out https://www.roshi.sg/home-loans/ for a more detailed comparison.
What is Pre-Qualification?
Pre-qualification involves putting together certain financial documents as well as proving your identity. The majority of home loan offers will require most of these documents to be presented when you apply. If you are already pre-qualified, then these documents are readily available, allowing you to forgo putting them together again for future loans.
The typical information you will be required to produce is a statement of your income, (typically two or three of your most recent payslips) your current savings, and your other active investments. Assuming the information you provide is accurate and recent, you will easily get pre-qualification approval.
Why Does Pre-Qualification Help Me?
Other than allowing you to forgo the need for your financial data when making a loan application, home loan pre-qualification also allows you to have a better understanding of the type of loan you can afford to take. It will show you your current savings and the income you have to spend, allowing you to determine the exact amount of money you will have to form the repayments from the loan of your choice.
As we have mentioned many times in the past, remember not to utilize all of your savings for your loan. It is always best to leave a minimum of 10% of your savings to keep accumulating. This way, if you run into a financial burden from some other part of your life or if the interest rates for your home loan go up, you will have ample savings and backup salary to keep up with them.
Happy house hunting!