What are the major reasons behind the rejection of a Home Loan application?
Buying a home is likely to be one of the biggest investments you will ever make in life
But this dream is very difficult to be realized by a middle or lower middle class person because of the rocketing prices of real estate and the growth in demand for houses. Also, it is very tough for a normal person to get the loan application sanctioned, if all his information and documents are not in place. There are a lot of reasons as to why a home loan application gets rejected. The most common reasons for home loan application rejection are as follows:. If you have recently switched a job Most banks in India approve home loans for people who have been in their current job for long as they look for stability in the person. Most banks do not approve a home loan if you have recently switched your job. Home loan applicants who have been in their job for at least 2 years are eligible to apply for a loan. Banks are more inclined in approving such applications readily. Poor CIBIL score CIBIL is the most popular credit bureau used to evaluate the credit worthiness of a person. If you have ever defaulted on any credit card payment or might have been missing paying EMI’s on time for a personal loan, thinking this does not affect anything, then you are wrong, as this leads to a drop in your credit score. If your credit score is poor, then the chances of you getting a home loan are much reduced. Existing debt If you already have a pending loan, then getting another loan becomes difficult until the previous loan is paid completely. If you are already in too much debt then it is better not to even apply for a new loan. Moreover, the applicant shall look for a NOC to show a clean debt record. If you have been loan guarantor Also, if you are the loan guarantor for someone else, then the probability of you getting a loan diminishes, until that loan is fully repaid. If the property is not authorized If the property you are looking to buy is not authorized by the government or local administration body, then the probability of you getting a loan is almost NIL..