Home Loan Application rejection reasons

 

Home Loan Application rejection reasons

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There are several others factors that could influence this decision these you may not even be responsible directly. However, you need to be aware of those rejection reasons. Hence the following are some of its reasons.

1. Previous Rejections

Banks and NBFCs have records of all rejected loan applications in their database. Once you apply to a bank, this will show up in your application verification check and could create a problem as it affects your CIBIL score.

2. No Job Stability

Banks place a high reliability on job stability and often insist that an applicant needs to be employed with a particular company for a certain minimum period to be eligible for a home loan.

3. Defaulter’s property

The defaulter could be a tenant, relative, who may have slipped up on a loan payment or may have unpaid credit card dues and, hence, was reported to the national credit bureau.

4. The age-factor

Believe it or not, but the age of the person applying for a home loan creates an impact on the decision-making process of a home loan application. Let’s take 2 scenarios to understand this better.

If the person applying for a home loan is less than 21 years of age, a lender may be quite hesitant in granting a home loan owing to the unsureness of the applicant’s employment or his/her capacity to pay back the loan on time.

If the applicant is aged 52 years and is nearing his or her retirement, the lender may be reluctant to approve their home loan. This can be due to uncertainty of income stream after the retirement age of 60 Considering that the loan tenure is 15-20 years lenders will look for an income stream for the entire period of the loan

5. Bank’s policies on profile

If some income or areas are listed in their policy guidelines as not appropriate for lending, the bank will not be able to approve your loan.

6.If you have a higher FOIR

This Fixed-Obligation-to-Income ratio is a ratio of the total monthly obligations including the EMI of your applied loan to your monthly income. Items like monthly insurance premium payments, EMIs on ongoing loans (if any) are added with your home loan EMI to arrive at the fixed obligations. Usually, the ideal FOIR is <50%. This means your committed monthly outflow should not exceed 50% of your total monthly income. A higher Fixed-Obligation-to-Income ratio (FOIR) ratio means you are a little stretched and that your home loan eligibility will come down.

You can apply for an attractive offer with best possible Rate of Interest and Terms for Personal Loan, Business Loan, Home Loan and Car Refinance Loan.

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