Home Loan Rejection

Getting Home Loan Rejection from Bank?

IN Real estate property  investment is one of the most significant investments any individual will make. Buying a home, be it as an investment or for residential purposes, might take years to materialize. With the current prices being very high, houses are something other than something that can be bought by paying upfront but go for a loan from NBFCs or banks.

With most lenders embracing digital technology in a year, applying for a home loan has become moderately easy. But it doesn’t mean gaining your home loan approval has become effortless. Home loans are an investment that happens for the long term, and a vast amount is invested in an individual with the guarantee they will pay back the home loan with interest.

This is why banks have several screening guidelines to ensure they provide reserves to the right person and that the person does not feel loaded in paying their loan EMI and needs more funds for their daily expenditures.

Reasons for Home Loan Rejection

CREDITCARES  aware of  causes for a home loan rejection commonly remain the same across all the banks, except that every bank has its internal policies/ terms in which they give out loans to worthy borrowers means clients. Home loan rejection could have happened due to the below following reasons.

• A Person with a Lower credit score
• Irregular occupation
• Inadequate income
• A person’s Previous credit behavior is bad
• Working in a delisted private enterprise /company
• Not falling into the age limitation
• A person living in a place is in an unlisted place.

Home Loan Rejection Criteria

Eligibility Criteria

CREDITCARES will help to acknowledge about home loan rejections reason so that people will understand this matter clearly

Each Bank has its internal policy terms for its home loan systems. They genuinely check on your salary, profession, the company you are working experience, etc., that any loan applicant needs to meet before proceeding. Then the Home loan application will only be accepted if any person fulfills these criteria.

 Low Credit Score 

The main reason for rejection of a home loan application is if the home loan applicant has a low Credit Score. Any bank, when it gets a loan or credit card application, will pull out the person’s credit score, which is available with the number of credit bureaus serving for CIBIL checks.

The credit score is the accumulated score based on how regularly you pay your loan or credit card bill. The first step was taken by a bank when filtering your application form. You will reject your home loan if your credit score looks very low.

The best way to check your credit score before applying for a home loan in any company. That will give a clear idea to know about the status of a person’s CIBIL status.

Late or Delay payment or discrepancies on your credit report

A credit report comprises the complete record of your loans or credit cards, how regularly you repay your credit due, delayed payments if any, etc. If any applicant has the words “settled” or “written off” against any credit account or loans, your loan application will be rejected as these words suggest that you have defaulted on your loan and the lender has to settle the bill, accepting that the individual will not pay back the balance amount which was due in the lender book.

Again, if there are any discrepancies, like your date of birth is different put or written on the application form, then it will also take it for rejection of the home loan. The best way to correct such discrepancies is to avoid rejecting your home loan. These measures can resolve small mistakes not to occur.

Frequent job changes

Peoples Changes jobs are expected when the right opportunity with good pay comes along. If a person changes jobs frequently, say within six months, or a year, it creates an image that the applicant could be more responsible. In such cases, the bank might reject your application form when they find a job and are changed regularly.

Not in lender list of approved employers

You may work in an organization outside of the bank’s approved employers list. In such cases, the banks feel that your job could not be more secure and reliable to pay back the loan amount. These might be one of the reasons for rejection at one time.

Insufficient salary

Salary is an essential criterion for a home loan. If you match the salary criteria defined by the bank, it might accept your application form.

There are also other things where your application might have been rejected though you have a higher income. If you have a lower Income that does not satisfy your loan eligibility, then it will not be accepted by them. After Paying Emi’s salary, it needs more for Another loan Emi.

High level of debt or is already a loan guarantor.

Home loans are considered high-value assets, which means that a will repay high Emi for an extended period. If an applicant already has debts that must repay, the loan application might also be rejected. Besides, if any applicant is co- applicant means a guarantor for another loan, it will be at risk then another person will not pay their loan, which falls under the applicant who has to repay the remaining dues as a loan guarantor. This is because loan Emi and loan amount will be considered based on both applicant profile considerations. It can also take as a home loan rejection reason.

Co-applicant has a poor credit score.

Now lender also asks for co-applicant, and most home loan applicant goes for joint applications to reduce the burden of EMI. Even if a co-applicant in a home loan has its advantage, it can also cause the application to be rejection reason if your co-applicant credit score is found to be low. Then you will consider the loan amount, and its EMI will be chosen and taken on both applicant profiles. So, if one applicant has a low credit score, it will bring down the group’s overall score.

The Property has a legal problem.

Applying for a home loan, you must submit all the original documents about the Property to the bank. The Property will be considered the collateral for the home loan. We will reject the loan if there is no proper documentation or the Property is under legal action.

Purchaser should verify the Property and its documentation before purchasing it from the owner to avoid any technical issues. People can visit Government places where they can check their property documents legally and where their officers can verify them. Separate departments are also there to check it; that should be no problem with property papers legally and accurately.

Regular credit Enquiry

If a person applies for credit multiple times in a short period, you will look at how to manage finances properly and always look for expenses as you overspend. It will define to the lender that you are not trustworthy for the home loan proposal, and it can get rejected. So frequent credit enquiry also affects your CIBIL history.

There are two things to tell Home loan rejection will affect client credit rating on the application submitted where you are in

Stage1: If you go to a bank or visit their website to enquire about a bank’s Home Loan processing fees, rate of interest, tenure, etc. hence your credit score will not be affected by the bank through different sources as initial information check. This is called just a query where you are just informed by them

Stage 2: On the other hand, when you submit your application for loan processing with documentation for initial loan eligibility where they will check your credit history with their credit bureaus company. when they find out after checking that client score is low then your application will be rejected there. Now this will affect your CIBIL enquiry and show in your credit history

Home Loan Processing Procedure

CREDITCARES made a system where you can query for home loan procedures and apply in as best possible way with the required document. General processes are discussed below. The home loan process is simple and much quicker for all customers, where they can apply online and offline to get approved offers on home loans with attractive interest rates. The loan amount is sanctioned with all procedures of the lenders like verification and legal documentation check with legal teams

. The borrower needs to either apply with the application form where all the details are required to be filled up carefully to avoid any mistakes. They can also call the home loan expert for advice to proceed with the application process.

A representative will collect the filled application form with all types of essential documents required for the verification process. The bank will start checking the client’s home and professional information. If there are no issues with the information given on the application form, the home loan application will likely be further. The approval process moves to the final level when passing through document verification and eligibility criteria. In the last stage, details of the loan are two of process like rate of interest, tenure is to be fixed, and it would be gone for final sanction. Then both the lender and borrower will finalize the deal with all terms and conditions mentioned in the sanction letter.

But your home loan form will be denied or rejected, then you get information in the mail or receive a rejection letter where the application rejection reason may be mentioned.