An application for home loans would be less tedious if it weren’t for the number of documents and the lengthy process it takes. With rising lifestyle and income source, there has been growing number of buyers for homes in India. Along with this comes millions of loan application to leading banks and finance companies for approvals. However, experts say only a few are approved and the rest get rejected due to incomplete documentation, or some other reasons. In fact, the rate of rejection has indeed increased in a recent couple of years.
The article helps you understand the reasons for your home loan application rejection.
It is essential that our home loan applications get approved. The question is not about loan sanction for buying a home but a rejection means vital aspect which is viewed as negatively by the bank or finance firms.
Some of the reason for loan rejection would be a change of employment, your property is too old, your personal profile may not meet eligibility criteria, your loan has recently rejected.
Let's understand in detail
If you’re changing your job too often or have been an employee of your current firm for less than a year, then it’s quite possible for your chances of rejection would be higher. It's simple staying with a single employer for around two to three years proves your stability of income source which is an important consideration for lending institutes. Also, if you get qualified for loan and if you change the job during the tenure of your loan, it's advisable you inform your bank or financial institute of the change so that there isn’t any confusion regarding the account from which your monthly installment is debited else they might incur charges for cheque bounce, or late payments.
Many times people may identify their property and then apply for home loans. But the thing is the older your property, the harder it becomes to seeking an approval. For property which is old than 20- 25 years its becomes difficult to get approval on home loans. Well it's because – the market value of your property is bound to be less because of its age. Therefore, there is a chance of getting it disapproved or getting qualified for a lesser loan amount.
Earning a higher salary or having a good post in an organization would ensure a loan qualification. Factors like credit history/credit score; previous relationship with the bank, documents of property, etc. play a significant role while processing your application. Especially decent credit score will always put you at an advantage on qualify for suitable housing finance. Your credit score will play important role in qualify for any form of a loan.
Lastly, it’s genuine that if your best home loan application is rejected by bank or finance company in a recent couple of years its get affected on your CIBIL report. When the current bank will know this, they will probe in order to know the reason for rejection. If the reason stands for cheque bounce, installment delay or something then once again your chances of rejection is going to be high.