The application for a housing loan has been rejected! Reasons lenders won’t tell
You get a home loan when your own eligibility (primarily financial reasons) along with the eligibility of your property matches the lender’s policy. We will talk about the reasons why lenders doubt your right to get a home loan and they may reject your application.
1. Bounce of the processing fee check – Whatever the reason, bankers are really sensitive about the processing fee check and it is considered very inviolable. Make sure you have enough funds in your account to clear it.
2. Financial Eligibility – As a rule of thumb, a salaried person can have 50% of their net salary and a self-employed person can have 75-80% of their monthly income paid as EMI on any loans. If you are already paying substantial EMIs, more than what your finances can afford, your application may be rejected.
3. Guarantor for a foreign loan – OK, so you have become a guarantor for someone else’s loan. In the lender’s eyes, this is as good as getting a loan. So be careful while doing this.
4. Age of the property – Yes, lenders do believe in the age of the property. They won’t finance a property they think won’t last 35-40 years. weird!! That’s how it goes.
5. Your contribution – The lender requires a minimum of 25% of the total value of the property to come from you. Any less and he starts to get nervous.
6. Too Many Co-Owners – To counter the point above, you may want to add more co-owners to increase your eligibility, but the lender doesn’t like having too many co-owners either.
7. Co-owned property with a not so close relative – NAG. Property co-owned by a friend. The lender says thank you sir – we won’t be able to finance it. Co-ownership with an unmarried daughter, cousins, colleagues – the creditor will probably reject the application.
8. Career change – Bankers are conservative and that’s good for the economy. They don’t like risk takers like someone who is between job changes or someone who has quit to start up on their own – they prefer to wait on the sidelines for you to stabilize before they fund you.
9. Educational Qualification and Work Experience – They may not say it specifically but deep in some page of the rules there are restrictions considering your educational status. A bachelor is less likely to have a stable job and this poses a potential risk to the lender. Likewise, if you jump into the job too soon or are brand new to the job, your chances of getting a home loan may decrease.
10. Your employer may not be worth its salt – You work for a company that is not known in the market. The lender may ask you to obtain the financial details of this company.
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