With the rise in real estate price, it’s really difficult to buy or build a house with the savings. Most of us are unable to bear that cost. So, what’s the solution? Home Loan.
Home Loan is a handy and flexible loan option. It is a secured loan which offers lower interest rate with repayment tenure of 30 years. Though getting a home loan is quite easy, but one must keep in mind that there can be situation where your home loan application gets rejected by the lending institution. So, before applying for the loan you must be aware of home loan rejection reasons.
Here we will discuss home loan rejection reasons which you can easily avoid-
- Credit Score– A good credit score is mandatory for home loan approval. If you have a low credit score, then it will be reflected that you have low repaying capacity which is a home loan rejection reasons.
- Job Stability– Switching jobs can negatively affect home loan application rejection. A stable job in a company for a minimum 2 to 3 years helps in building trust with the bank. If you switch job frequently, then it might be a home loan rejection reason.
- Credit History– If you have any pending payments for credit card bill or loan EMI, then try to clear. Delayed or failure in payments will decrease your credit score which will result to home loan rejection reasons.
- Approval of Builder and property– Before taking home loan, you must be sure about the authenticity of the builder, location, resale value and much more. Among these, the builder’s property is an important criteria. If the lending institution rejects the builder and its property, then it will add up to the home loan rejection reasons.
- Age of borrower- Usually, bank avoids to provide home loan to the borrowers who are close to their retirement years. If your age is 50 and above, your repaying capacity will decrease day by day. This will result in home loan rejection reasons.
- Unpaid phone bills– Though it sounds unusual, but unpaid phone bills will result to home loan rejection reasons.
- Previous tenant has default record- If your present residential address falls under the defaulter’s list or your previous tenant has a default record for loan repayment, then your home loan application gets rejected. Also, if you reside in a locality which is also under the defaulter’s list, then it will result in home loan rejection reasons.
- Mismatched signature– While applying for home loan, you must be very careful about your signature. You need to have the same signature in all the places or it will result in home loan rejection reasons.
- ITR File– Whether you receive FORM 16 or not from your employer, you must file income tax in every financial year. Before approving home loan, banks check the ITR file of last 2 financial years. Any gap in the ITR file will lead to home loan rejection reasons.
- Income– If you do not fulfill the income criteria for home loan application, then it will lead to home loan rejection reasons. Moreover, if you have low income scale and applying for a high loan amount, then it will result to home loan rejection reason because of your low disposable income.
- Loan guarantor- If you are a loan guarantor, then there may be a situation where you need to pay the loan if the applicant fails to pay. This will lead to home loan rejection reason.
- NOC of previous loan– Its mandatory to take NOC of your previously closed loan. If you fail to produce the NOC, it will lead to home loan rejection reason.