Home Loan Pre-Approval Letter Query? Letter missing CRUCIAL details ...

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Emperor

Emperor

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Hi Friends,

One of my friend is about to sell her property.

She has been contacted by one buyer (via Estate Agent/Broker) and he showed her Loan Pre-Approval Letter and she sent image (xerox of Original Letter) of that document to me.

Now as I can read the document (1 page only), that letter at top just have Bank Name (Nationalized/Govt Bank) in Single Bold Font, without address or any detail of that Branch?

In full letter just once mentioned Buyers Name and don't have Application Number, Buyers Address, neither have bank official Signature, nor Bank Stamp/Seal and Bank Branch Address also missing!!

Now I have doubt that how a Nationalized bank gave Loan Pre-Approval letter to buyer, that missing all above Crucial Information's?

Can any one who have knowledge about such Loan Pre-Approval Letter, please suggest.

Regards
 
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Looks like it must be something of a online offer and letter based on that, Stay away

In these cases it is best to involve a Trustworthy Lawyer in your area for the Sale and Registration purpose. Speak on a Fixed cost charges for everything. Even a good Real Estate agent could help (Many are greedy, Just exercise Caution).

Usual Process:
a. Now there will be Sale Agreement made which will take a token amount from Buyer via Cheque/DD where details of the sale transaction will be written. This is done on a stamp paper. Lets say 10% of Sale value. (Timelines will be mentioned here and penalties if buyer backs out).
b. Once the Buyer has approval of loan and bank has agreed to release the cheque/DD in your favor, Now you should have rest of 10% amount in your account. You go and get Registration date, Get Sale Deed done and register it at Govt Office. Get 80% of the loan amount as Cheque/DD from the Bank. Which will be handed over to you when Bank takes your Buyers documents.

So in the name of Lord the almighty, Please get a Lawyer. Paying for services like this can save you Lacs of Rupees and save you from a lot of legal trouble.
 
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Involving of an agent is the safest bet here. He may charge 0.5-1% fee but its all headache free process.

I too involved one friend agent who is from real-estate and he took care of every bits and pieces.

Without any property knowledge nobody can come with such per-approval letters etc. as the process itself takes a good 10-15days of sweet time where the bank personnel physically visits the property to ascertain set parameters based on which the loan valuation etc. things are decided for the buyer.
 
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First of which bank is this? I've seen Pre-Approval letters from banks before, I had one but it was quite detailed everything was printed, but that was a given as my bank is one of the top 3 banks in India.

I cannot confirm whether the document is real or fake without actually seeing it, but I don't think any Bank will give a letter without mentioning: Application Number, Buyers Name or Account number, or have bank official Signature, nor Bank Stamp/Seal and Bank Branch Address.

Also, there is validity in most of these Pre-Approval letters, I believe ICICI's was 30 days, but it varies from bank to bank. Your friend can also visit any bank branch close to her and show the letter to confirm the authenticity of the document.
 
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@nRiTeCh

yes, there is a broker and the buyer came via broker only, I didn't mean distrust but cross checking with knowledge people is safe side, as she can't visit lawyers/banks etc. frequently with each offer to verify as it's far away from her place.
 
Emperor said:
@nRiTeCh

yes, there is a broker and the buyer came via broker only, I didn't mean distrust but cross checking with knowledge people is safe side, as she can't visit lawyers/banks etc. frequently with each offer to verify as it's far away from her place.
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OK. Isnt there any male counterpart like husband, brother or her son who can take it further ?
 
Loans can be approved (in pre-sanction) on basis of buyer's financial capability and credit history. These approvals don't need property details initially.
Such approvals only mean that loan can be provided to the buyer without any issue if and only if the documents of property to be purchased are OK and have no dispute.
After property is finalized by the buyer then the property documents/details are shared by buyer to the bank and the process goes on as usual.
 
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Pre approval amount and loan amount are not the same.
Pre approval amount depends on credit history and salary, indicates max possible loan amount.
Actual loan amount will depend on property value etc.

Having pre approval only saves time while actual loan process by skipping the buyer side financial status (CIBIL, salary etc). The property valuation, and other formalities will take time nevertheless.

As a seller, I wouldn't worry about anything, as most you can lose is some time they waste of you.

You don't need to pay single penny for anything. Remember that (apart from brokerage if any, which I suggest you'll pay after all process is complete).

Registration fee, stamp duty, loan processing fee, valuation fee, legal charges, bonds charges, loan approval certificate charges, brokerage on buyer side, etc everything is to be paid by the buyer only.

Buyer will also pay 1% TDS on your behalf, deducting from the total sale value (not registration value, but actual total sale price) and paying to govt before 7th of next month after deal is complete.

Don't give final possession before all of the above is complete.
 
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Don't give final possession before you get your money either from the loan bank or as agreed and that you have legal proofs/receipts for every transaction and every hard-copy of formalities/documents..
 
Edit: this is the pre approval certificate I had received while applying via agent
 

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napstersquest said:
Pre approval amount and loan amount are not the same.
Pre approval amount depends on credit history and salary, indicates max possible loan amount.
Actual loan amount will depend on property value etc.

Having pre approval only saves time while actual loan process by skipping the buyer side financial status (CIBIL, salary etc). The property valuation, and other formalities will take time nevertheless.
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They can be same. Pre-approval forms ask you for desired principal amount of loan you wish for.
It's upto the bank to allow that or not depending on your financial status. The pre-sanction approval letter has this amount which means you can disburse that much amount and you're already approved for it given that property documents are OK and inspection is done (which comes later).

Yes, the actual disbursement amount can be changed by the buyer later when property is finalized. This obviously cannot be more than what you're eligible and approved for.
So you can have eligibility and approval for say 1 Crore and after finalizing property if you wish to disburse only 80 Lacs then you can.

Another scenario, eligibility for 1 Crore, buyer asked for approval for 80 Lac and pre-sanction letter contains 80 Lacs and when property is decided turns out buyer needs additional 10 Lac. This also can be done as buyer is eligible for 1 Crore but only wishes to disburse 90 Lacs. This may need additional processing time or reapplying depending from bank to bank.
 
enthusiast29 said:
They can be same. Pre-approval forms ask you for desired principal amount of loan you wish for.
It's upto the bank to allow that or not depending on your financial status. The pre-sanction approval letter has this amount which means you can disburse that much amount and you're already approved for it.

Yes, the actual disbursement amount can be changed by the buyer later when property is finalized. This obviously cannot be more than what you're eligible and approved for.
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What I wanted to highlight is,
Let's say I was approved for 80L. Property sale value is 85L. Does not mean I can get loan for 80L on purchase of that property for 85L, it will only be max 80% (in case of SBI in my case) of valuation of property. They can try to increase the valuation, but does not necessarily mean you'll get 80L loan. You are also correct.
 
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napstersquest said:
What I wanted to highlight is,
Let's say I was approved for 80L. Property sale value is 85L. Does not mean I can get loan for 80L on purchase of that property for 85L, it will only be max 80% (in case of SBI in my case) of valuation of property. They can try to increase the valuation, but does not necessarily mean you'll get 80L loan. You are also correct.
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Correct. During my home purchase I was eligible for 48L and value of property was 51L and in the end I was sanctioned 45L.
 
What everyone else said. If she doesn't have time for such things and doesn't know how the system works, get a broker.

Tell the broker to get a good property/tax lawyer. Brokers have connections to lawyers and registration office and will do the job from start to finish. They do this for a living and they want their clients to bring new people to them. A licensed broker will help her more than she thinks.

She just needs to take time to sign documents and tell her not to give any original documents till she gets entire money in bank account.

So again, get a good licensed broker.
 
6pack said:
What everyone else said. If she doesn't have time for such things and doesn't know how the system works, get a broker.

Tell the broker to get a good property/tax lawyer. Brokers have connections to lawyers and registration office and will do the job from start to finish. They do this for a living and they want their clients to bring new people to them. A licensed broker will help her more than she thinks.

She just needs to take time to sign documents and tell her not to give any original documents till she gets entire money in bank account.

So again, get a good licensed broker.
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she hired licensed broker and the same so called licensed broker bring buyer who have Loan Pre-approval letter without sign/stamp/address of bank branch
 
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