To own a Home is everybody’s dream and Home Loans help accomplish this dream for many. However, this dream also remains unfulfilled in many cases where the home loan you apply for is rejected by the bank. So here are a few reasons that may lead to the rejection of your home loan and thus must be paid attention to at the time of applying for a home loan:
1. Low Credit Score
A low credit score adversely affects the chances of you getting a home loan. A low credit score may be due to a default in payment or delayed payments of already existing EMIs, Credit Card bills, etc.
2. Repayment
The ability of an individual to repay the loan also plays an important role. Before being granted a loan, the bank runs a background check on the income of the applicant so as to determine his/her ability to repay the loan. In case your bank feels that the loan amount is beyond your ability to repay, the loan application will be rejected.
3. Supporting Documents
It is important to submit all the requisite documents and papers that the bank asks for. In case of any incomplete or incorrect information submitted by you, your home loan application will be rejected.
4. Existing Debt
If you already have ongoing loans that you are repaying, the bank may reject your application for the home loan owing to excessive liabilities on your head. Apply for a Home Loan if you have the capacity to pay it easily. If you are considering your partner’s income then it is better to make him/her the co-applicant so that the bank is aware about the joint income and payback capacity, thereby deciding to sanction loan swiftly.
5. Bank Policy
At times the loan maybe rejected due to a conflict with the internal policy of the bank pertaining to location, etc. You could try to talk to the banks though and work something out.
Further, apart from the above mentioned common reasons some of the uncommon reasons for loan rejection are Unapproved building as per bank rules; approved building however unapproved property/ project; conflict between price mutually agreed between buyer and seller and the price at which the property is valued; defaulting/ black listed previous tenant; and irregular source of income or employment.
