Mistakes to avoid while taking a loan against property
A LAP or loan against property is a secured loan given against a commercial or residential or property…Read More
When thinking of investing in a new home, one should consider applying for a home loan. Applying for a home loan involves keeping a check of all the documents, checking the rate of interest, finalising the banker, technical and legal checking and signing of agreement.
A borrower might not be aware of all the proceedings and might not be able to fulfil the home loan criteria because of past credit records. Read below to understand more about the reasons behind home loan rejection.
Here are the top 7 reasons behind home loan rejections:
A bank/lender always looks at the credit record and the history of the person like the timely payment of past loans or EMIs of the borrower. If the credit score is below average, which is below 600; then there are chances of your home loan getting rejected.
If the borrower has changed many jobs then one might face rejection. The borrower should have been an employee of a firm for at least 3 years to get the application approved.
Banks and lenders always keep tabs on whether the borrower has filed the income tax return on a regular basis. This should be done notwithstanding whether the loan seeker has received the Form 16 from the employer or not.
Every signature that goes into seeking a home loan, from the home loan application to the attached home loan eligibility documents and the one in the registered bank documents have to be identical. Failing this an application can be rejected.
As the lender/bank always checks loan histories, any loan applications that have been rejected prior to the one being applied for can also act as a deterrent to getting a home loan.
A borrower who is close to the age of retirement automatically finds himself at a disadvantage as lenders question the ability of the person to pay back the loan.
In case of more than one debt in the borrower’s name exists then the borrower’s income is calculated by subtracting the credit repayment from it. If the income thus received does not meet the repayment capacity of the lender, then the application can be rejected. These are a few reasons that could lead to the rejection of a home loan application. Hence it is better to do all the research regarding the same to ensure a smooth process.