12 Reasons Your Home Loan Get Rejected!
A home loan is a long tenor loan which demands a steady repaying capacity by the lender. Generally, the tenure on home loans lasts up to as long as 30 years. Therefore, a lender usually checks through various factors before approving the home loan like CIBIL Score, the age of the loan applicant, repayment ability etc. But sometimes, it might happen that even getting everything in place, you might face a rejection of your home loan at interest rates.
Let’s have a quick look that why does your home loan gets rejected
Job stability
Though job hopping is quite common these days due to personal reasons or for better career options, frequent change of jobs creates a bad impression in the eyes of your lender representing a sense of uncertainty in their mind regarding your repaying capacity.
Poor credit score
Credit score plays a significant role when one applies for a home loan. A good credit score increases your loan eligibility. A borrower needs to have a CIBIL Score of 650 or above to get a housing loan instantly.
Repayment
Before granting a loan to you, your lender performs a background check to assess your income in order to determine the ability to repay the loan. In the case you lender feels that the loan amount is beyond your repayment capacity, the loan will get rejected in that case.
Supporting documents
You will get an instant home loan if you all the documents ready with your making an application. In case, if you make submission of any incomplete document or any incorrect or misleading information, your home loan application is rejected.
You have other loans to repay
Before making a home loan application, your lender also checks whether you have previously availed any other loans or not which might affect your repayment ability.
Frequent applications
Each time whenever you make an application for a fresh loan, it gets captured on your credit report which brings down your overall credit score. It is advisable to wait for some time before making any other application if you have any other loan running at present.
Age
The housing loan is available to individuals within the age group between 18 and 70 years. If someone who does not meet this criterion will not get the loan.
Error in your credit report
Sometimes it might happen that you may face a loan rejection despite having a clean credit history. Therefore, it is important to get your errors rectified within time.
Income Tax Return Filing
It is very important to file your income tax returns (ITR) each financial year whether you receive the Form 16 from your current employer or not as your lender and banks check if you have properly filed ITR or not before approving your home loan.
A lender has issues with the profile of the employer
Despite having a clean credit record, the nature of employment and employer also has a bearing on your prospects when you apply for a home loan.
Property approval
Before lending you a loan, lenders also check the age of the building before approving your loan application. As your application will not be approved if the building is too old.
Incomplete application form
Your home loan application even gets rejected whenever you make submission of incomplete application form. Therefore, you need to submit a proper application form while applying for a loan.
