Top reasons of home loan rejection

Bank and finance companies follow stringent approval processes, which usually is the reason for the rejection of the housing loan application.  

New loan applicants are often unaware of the complications involved in filing a loan application as a lot of paperwork and documentation needs to be done. Banks and financial institutions follow a strict approval process, due to long-term commitment and to assess the repayment capacity of borrowers. Therefore, it is naturally very difficult to get all the details right the first time. That is why; we dug in a little deeper into this matter and have put together a list of easily avoidable problems faced by rejected housing loan applications. 

If you had already faced a home loan rejection or planning to apply for a home loan, stick to this blog to get some insights on the same reasons for home loan rejections.

1. Low income: Every bank has its own rule of income limit for individuals based on geographical locations. The requirement of income is usually high for people living in metro cities. You need to fall into the minimum income limit, or else your home loan application may be denied.
2. Property Approval: If any property is not approved by the local bodies or agencies, lenders refuse to give loan for that property. In some cases, the property may not adhere to the relevant guidelines prescribed by the local authorities. At times, banks are hesitant to provide loans to an old property because lenders know it will not have a good resale value.
3. Builder Approval: Before applying for the loan, you need to check if the builder is approved by the banks. The reason is that; at times, you might have an approved real estate property but not a builder approved by the bank. 
4. Age of the borrower: Most of you must be aware that the home loan tenure is mostly up to 30 years, the lenders expect your age to be 60-70 at the time of maturity. Therefore, borrowers who do not fit these criteria may face a home loan rejection. If your age is more than 30 years and you need a loan, you can bring in your spouse, siblings, and children as co-borrower to become eligible for the housing loan. 
5. No Dues Certificate from previous lenders: Obtain a ‘No Dues Certificate’ from the lenders for the loans you have already closed. If you do not get one, banks might deny your housing loan application. 

While applying for a loan you need to carefully evaluate it. So far you must have at least got the idea that getting a home loan is a long process. You can avoid the hassle home loan application process by keeping a checklist, concoct them all and become eligible to get home successfully for your own. 

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. Propertypistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.