6 surprising reasons for home loans rejections

Home loans are an integral part of the home buying process. Home loans can be taken from any lender as per the choice of the borrower. Also, if the home loan is rejected by one of the lenders, the borrower can avail of loans from another lender by applying for a fresh application for the home loans. The borrower should compare the interest rates of the lenders and should choose the one who charges the lowest interest rates and lower processing fees. The home loans interest rates are currently at 6.50% on the lower side and may go as high as 18% per annum. The home loans processing fees are as low as 0.25% per annum, going up to 1% of the loan amount or Rs.10,000, whichever is lower. Thus the borrower should choose the lender who charges the minimum interest rates and lower processing fees. The loans can be repaid at either a flexible interest rate or else fixed interest rates. It is always beneficial to make the repayment of the loan on a cumulative basis as the interest rates of the home loans are reducing drastically. The homes loans at fixed interest rates come at higher interest ones than the floating ones.

The rejection of the home loans can lead to the dreams being washed out of the home loan borrower. Thus, it is necessary to keep proper documentation ready while proceeding with the loans and keep the CIBIL record proper. The banks are keen to extend the home loans to borrowers who have proper CIBIL scores and are honest credit payers. Banks need genuine prospective customers who can repay the loans and are amongst the financially stable persons. The property buyer can avail of tax benefits under income tax act 80C and section 24. The housing loans installments should be paid on time to avoid penalty being charged by the lender. Also, on-time payment of the installments helps in improving the CIBIL score of an individual. The borrower can set the auto-debit ECS mandate for the timely payment of the installments of the loans. ECS mandate is the electronic clearance mandate required by the bank to auto-debit the loan installment from the borrower. Alternatively, the borrower can pay the loans installments by cheque depositing into the bank or online payment through debit card or net banking.

Surprising reasons for home loans rejection

Poor CIBIL score:

The bank expects the CIBIL score to be a minimum of 700 points for the approval of the loans. Also, there should not be any default history of the credits taken by the borrower, which can lead to the rejection of the home loans.

Poor maintenance of bank balance:

The poor maintenance of the bank balance can also lead to the rejection of the home loans. The bank expects that the borrower should maintain a sufficient bank balance in the bank account so that any delay in receiving salary should not lead to a delay in payment of the installments. Thus, the bank expects the borrower to maintain a good amount in the bank account, representing that the borrower is financially stable.

Frequent job changes:

Frequent job changes put the impression that the borrower has an unstable job. Thus continuation job changes should be avoided.

Low qualification of the applicant:

Bank gives preference to the borrowers who are at least a graduate. People who qualify up to 10th, 12th are the ones who are under-graduate and thus are considered low qualified. Bank has the impression that the people who are well educated can get jobs easily in the market, and thus, the chances of the qualified persons defaulting the loans is less compared to the less qualified persons.

Loan applicant found medically unfit:

The bank finds that if the applicant has a poor health history like suffering from dangerous diseases like cancer or any other major health disease shows that the life span of the loan applicant is shorter and thus may not live for a longer span which can lead to rejection of loans. Thus being disease-free and healthy is necessary. Remodeling your apartment is a great way to enhance your lifestyle and make the most of the space you have. Whether you’re looking to make a few changes or completely overhaul the look and feel of your place, there are plenty of ways to improve your apartment’s interior design. From rearranging furniture, adding new lighting fixtures, or even painting walls, there are plenty of options for transforming your home into a more comfortable and enjoyable living space. With careful planning and thought, you can create an atmosphere that complements both your lifestyle and budget. Check out apartments for rent in los angeles ca.

Working at a hazardous site:

The loan applicants working at the coal mines or on construction sites like highways, tunnels, or mountainous regions are more likely to lose their lives while on duty. Also, the people working in the Indian Army, Navy, and Air-force, wherein they require risky jobs on the battlefield, are more prone to lose their lives while on duty. Thus the bank, in such cases, may sometimes reject the loan application.

The reasons mentioned above can lead to rejection of the loans. Thus if such circumstances happen that one of the lenders rejects the loan application, then, in that case, the borrower should avail loans from another lender. Getting a loan rejected from one lender does not mean that no lenders would approve the loans. Thus trying with another lender for the loan application is better in case of rejection by one of the lenders.