Buying your own house is a dream of every person. One wishes to live in a house with family which they can call theirs’. Buying a house is a major financial decision one has to take considering their financial status and future plans. Applying for a home loan can be a lengthy procedure but it can be easier if you know all the documents required. If you follow a few easy steps, you will get the best home loan available in the market. But sometimes even after following through all the required eligibility criteria, your home loan application may get rejected.
We have listed below the reasons why your home loan application might get rejected. Know them all and then apply for a best home loan to avoid rejection…
Previous loan defaults
People take various loans time to time to fulfill their personal and professional needs. If you take a loan previously and fail to pay it back in the given tenure, the lender adds you to a defaulter’s list. In you are named in such a list, the bank/NBFC won’t grant you a home loan. A home loan is the longer loan which is supposed to be handled by the borrower with care. As it involves huge amounts and longer tenure, the lender needs to trust the borrower that he/she will pay back the loan within time. If you have defaulted on a loan, there is no reason for the lender to trust you with such a huge loan. Thus you home loan application is rejected.
Also if you are a guarantor to a person who defaulted a loan, you are automatically become eligible to pay back that loan. That’s why it becomes your obligation and your own home loan application gets rejected.
Poor credit score
Banks and NBFCs require a strong credit score of minimum 650 to approve a used car loan. If you have a credit score lower than 650, then your home loan application will get rejected. So if you do have a low credit score or no score at all, we suggest you to build a strong credit score to get your home loan approved.
Providing misleading information
When you apply for a used car loan, make sure that all the documents which you provide are legal and legitimate. Also the other required information provided by you should not be false. If the loan lender finds out that you have provided illegal or misleading information, then your home car loan application will get rejected. You may also have to face a legal action for doing so. This also includes mismatched signatures and unrecognizable ID proof/photo.
Multiple current debts
Banks and NBFCs check your current financial obligations and your ability to repay the home loan before approving it. If you have ongoing multiple loans or credit card outstanding, that means you have too many financial obligations. Banks and NBFCs refuse to provide finances to such customers. So pay back your current debts before applying for a home loan or your application might get rejected.
If you have changed too many jobs in the past, it reflects badly on your career graph. But do you know it affects severely your home loan eligibility? Jumping jobs shows your unstable employment thus giving an impression to the home loan lender that you will do the same in the future. And if you keep changing your job while paying off the home loan, you won’t be able to pay the EMIs thus being defaulter or late payer. The banks and NBFCs do not want to take such chances thus your home loan application is rejected.
Check the age bar:
If you are close to your retirement age and have applied for a home loan, banks and NBFCs are likely to reject your application considering your loan repayment capacity. If you are near to retirement, your loan repayment capacity is considered to be poor or zero in the future. Thus your age becomes a determining factor to cause your home loan application to get rejected.
Not filed ITR:
It is very important that every citizen in India should file their income tax return every year. Irrespective of the fact whether you receive form 16 from your employer or not, you should file your yearly ITR. Banks and NBFCs check whether you have filed your latest income tax returns or not before approving a home loan. So file your ITR regularly to avoid your home loan application rejection.
Property with issues:
If the property you are planning to buy is under any legal dispute, the bank/NBFC will reject your home loan application. Even if the builder hasn’t provided you with all the legitimate details or present any false paperwork related to the property, your home loan application will get rejected.
So be aware of the above given facts and apply for a best home loan here!