What is IPA and how will it help your mortgage journey?

If you are planning to take up a home loan, it’s essential to understand what is an IPA? An IPA or In- Principle Approval is an estimate given by mortgage lenders to prospective buyers before finalising any property or to existing property owners before deciding on a refinancing. When you apply for an In Principle Approval, the bank will evaluate your financial health and credit history.

Why is IPA important?

Helps You Find the Right Property
The property market offers numerous options, which can be quite confusing. By applying for an in principle approval, you can understand your home loan eligibility and focus on properties that fall within the limit. This saves you a lot of time and effort at the time of home loan application.

Speeds up the loan disbursal process
When you get an in principle approval, most of your initial verification is already done. Therefore, when you actually apply for a home loan, the banks only need to verify the property documents before giving you the final approval. This is especially useful for properties that have a time limit attached to their transaction.

Better negotiation power
When you have an in principle approval letter in hand, you will be in an ideal position to negotiate with sellers. While negotiating prices, the sellers will take you more seriously vis-à-vis other buyers.

Helps you plan your finances
The key benefit of an in principle approval is that it gives you a fair idea about how much you currently have and how much you need to borrow. Once you understand your loan eligibility, you can further plan on how much money you need to arrange if you wish to make a higher down payment.

How to get an IPA home loan?

  • Compare and choose a home loan package.
  • Inform the bank that you are seeking an in principle approval.
  • The bank will give you a list of required documents for submission and assessment.
  • Once the documents are submitted, the bank will process your documents and give you an approval for your in-principle application.

Surely, in principle approved home loans gives you a head start that a regular home loan doesn’t. Once you have the in principle approval, you can start planning your finances well ahead of time and purchase your home at the right time without the fear of last-minute loan rejection.


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