Home loan process
Applying for a home loan may seem to be a good idea if you are looking forward to buy the home of your dreams. You have all the qualities that make you a favourable home loan applicant such as good credit history and strong professional background, still to your utter surprise, your application gets rejected. Don’t get flummoxed. It is good to avoid the following unexpected pitfalls that may lead to the rejection of your home loan application:
Being a new job entrant
You may feel on top of the world when you bag a new job offering at high pay package. If you are in the process of applying for a home loan, lenders not only look for stability but also the fact that the applicant would be able to pay back the loan. Home finance companies generally prefer an applicant who is employed with a particular concern for a minimum period of one year. This is more crucial for private company employees as well as freshers.
This also holds true for frequent job changes. There is nothing wrong with switching jobs but it should not happen in a quick succession.
Not available on landline
You have provided the right information and completed the formalities even then your home loan gets rejected. The reason is that at the time of filling the form you had entered your landline number. The investigation team would have probably called up in the morning when you were away at work and since you did not pick up the phone they wrote off the report as ‘not responding’. This may become one of the grounds for your home loan to be rejected. So, make sure that apart from the landline number you also give your mobile number so that when the investigation team calls you are there to answer their queries.
Unpaid telephone bill
You would be surprised to know that an unpaid telephone bill can really hamper your chances of buying your dream home. An unpaid bill or even late payments can adversely affect your credit ratings which would not go down well with the lenders, providing them with a reason to reject your application.
So, in case you are planning to go in for a home loan make sure that all you bills have been paid.
Buying property with minor rights
If you are planning to buy property where a minor has rights in the property then you will have to face some problems. Though the person who is selling you the property may not provide you the information but the fact is that if you apply for a loan on a property where a minor has rights in the property then your application is bound to be rejected. The hard fact is that no bank gives loans for buying property with minor rights. So, when buying, make sure about minor rights in the property.
Hurdles faced by entrepreneurs
Banks can be a bit sceptical when giving loans to young and first time entrepreneurs. Banks want their money back and that too on time. Here established businesses fare much better as they have already created a reputation for themselves and banks can easily place their trust in them. The story is different for people who have just started out. With very less capital and a future not very stable from the banks point of view getting loans can be a tough affair. So, try to give the lender some testimony of your credibility so that they can place trust in you enabling you to get your loan.
Always get an NOC
If you fail to get an NOC or No Objection Certificate on an already closed loan, your home loan application may be rejected. Banks are very particular about this fact and would ask you to produce an NOC on a loan that you previously took and has been closed. In case you never asked for the NOC your application would be rejected despite the fact that all other papers are in order.
Signature mismatch
Be very particular about your signatures. Applying for a home loan is no child’s play. Here you would have to fill out lengthy forms which would require a lot of signatures. You should sign in the same manner and also attach the documents which carry your identical signature. The signature on the form and copies of documents should also match with your signature registered with your banks. So, make sure that you sign in the same manner or else you would have to again go through the entire process.
If you adopt the above-mentioned golden safeguards, your application is likely to be accepted paving the way for you to buy your dream house.
P.S: Sometimes, a particular kind of income, debt profile and geographic area is not found to be appropriate for lending as per the internal policy guidelines of a bank. Also, we are living in the age of e-governance where data is stored in the electronic database; this includes your accepted as well as rejected loan applications.
So, when you apply for a loan, make sure not to choose a bank which in the past has rejected your application. Your past records will be checked and there is a possibility that your application may be rejected again. However, if you still want to go ahead with the same bank, then try to explain to them the changes that have occurred over the years in your income, profile etc. If the lender is convinced, your application might see the light of the day. You can provide additional security which may include a guarantor, insurance policies, fixed deposits, collateral securities etc. to secure the loan.
YOU MAY ALSO WANT TO: Calculate your EMI before you get that Home Loan – Home Loan EMI Calculator