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.
The information contained in this document (“Information”) is for general information and/or educational purposes only and does not have regard to the investment objectives, financial situation or particular needs of any specific person. No part of the Information may be reproduced, copied in any manner or distributed to third parties without the prior written permission of Citibank Singapore Limited (“CSL”). The Information is provided “as is”, without warranty of any kind, it has not been independently verified by CSL, its related entities and their respective officers, employees, directors and agents (collectively, the “CSL Group”). Use of the Information is at your sole risk.
The CSL Group shall not be liable and expressly disclaim liability for any error or omission in the content of the Information, or for any actions taken by you or any third party, in reliance thereon. The Information is not guaranteed to be error-free, or to be relied upon for investment purposes, and the CSL Group makes no representation or warranty as to the accuracy, truth, adequacy, timeliness or completeness, fitness for purpose, title, non-infringement of third party rights or continued availability of the information.
To the maximum extent permitted by law, the CSL Group shall not be liable for any loss or damage of any kind whatsoever (including, without limitation, any special, consequential, incidental or indirect damages, or damages for loss of profits, business interruption, and any and all forms of loss or damage, regardless of the form of action or the basis of the claim, whether or not foreseeable) arising out of the use of the information (provided in any medium), even if any member of the CSL Group, has been advised of the possibility of such loss or damage.