Home Loan Rejection Reasons

You’ve followed all of the steps to the letter, but you’re still unsure about the outcome of your loan application. The worst experience is being turned down for a home loan, especially when you badly need one. Make absolutely sure you’ve exhausted all of your choices before going into the next bank to qualify for your next housing loan. The individual’s CIBIL score assessment is one of the most common grounds for home loan rejections. If the candidate has a poor CIBIL score, the bank will immediately reject the request.

Rejection Reasons That Are Common

Here are some of the most typical causes for your home loan application not being approved. The following are the reasons:

• Age of the applicant

If a borrower is approaching retirement age, his or her home loan in India application will be denied. The lender is cautious to lend to such borrowers because after a few years, it deems that your repayment capacity is insufficient or non-existent. Certain banks, on the other hand, may be willing to provide a short-term home loan. Short-term loans for large amounts would result in expensive monthly payments, negating the benefit of getting a home loan in the first place. As a result, the age of the borrower has a considerable impact on the refusal of a home loan.

• CIBIL Rating

In order to get a house loan accepted, you must maintain a good CIBIL score. Before applying for a housing loan, be sure you have a strong CIBIL score. To be eligible for a home loan, the applicant must have a high CIBIL score. As a result, while applying for a housing loan, the applicant must have a Credit history of 750 or better. The credit score of each client is kept by CIBIL (Credit Reports and Risk Management Solutions).

• Current Loans

If you apply for a housing loan while also still owing money from previous loans, the bank has the right to reject your application since your liabilities exceed your income. The bank has every right to be concerned that your leftover income (after paying all of your current expenses) will not be sufficient to cover the EMI for the home loan you want.

• Candidates with No Work Experience

Banks prefer individuals who have worked for the same company for the past year. The number of years of employment is used by the bank to assess the borrower’s stability and repayment chances. As a result, when it comes to bank approval of home loans, freshers do not feel relaxed and happy. Applicants who have changed current jobs may have their application declined for the same reasons.

• Illegally obtained property

Banks look to determine if the property has received local government approval. The loan may be refused if the bank fails to meet specified restrictions imposed by local authorities. Banks, on the other hand, evaluate builders before funding their projects. Even if the property is approved, your chances of getting a home loan are minimal if you choose a builder who has not been approved or is on the bank’s blacklist.

• Individual Income Tax Returns

Before approving a home loan, banks and lenders check for a regular track record of filing income tax returns for the previous two years. Even if your employer has not provided you with Form 16, you must file your income tax return every fiscal year. Banks and lenders look for a documented track record of filing income tax returns before offering a home loan.

• Property with Minor Rights

If the property you’re buying has minor rights, you can be rejected for a mortgage. Your home loan petition is likely to be denied if the seller has not revealed information regarding a minor with rights of ownership. Home mortgage applications for properties with minority rights may be denied by banks. If the seller has not declared that the property is owned by a juvenile, the bank is likely to reject the application.

These are a few of the most likely causes for housing loan denials. Nevertheless, in order to avoid rejection, it is always a good idea to verify your CIBIL score, as well as other variables, before applying for a housing loan. Carefully read all the terms and conditions of home loan before signing.