House is a place one would stay at. Everyone has the dream of how they want their house to be. And all that is done is to work towards this goal. Usually, out of all the goals, buying a house becomes the most expensive and maximum tenured goal anyone could have. Yes, home loans have made it much easy to buy one’s own house, however, things are not as simple as they may appear. Getting the loan approved is a tough task.
Credit history or credit score is the major thing that is checked before getting the loan approved. But, there can be a possibility if a person has never taken any type of credit. What happens in such a case? The loan is not approved? Well, certainly not true. There are many other factors that are also checked along with the score. There can be a possibility that one may apply for bad credit personal loan to get rid of older dues and the score back on track, but still following are few of the common factors for rejection of loans that the banks or NBFCs would tell you are:
Unpaid dues: If you have not paid dues of any older credits that you have taken Signature mismatch: the signature used in the loan application and on the ID proof do not match
Credit history: Of course the poor credit history or poor credit score
Documentation: The documents you submitted are adequate enough to get the loan sanctioned
Age of building: The building where you wish to buy a house is too old to get the loan approved
Age while application: Age of the applicant matters. Usually the maximum age for the applicant is 60 years, however, usually, they consider 55. And this can also be one of the reasons for getting a loan rejected.
Value related rejection: Suppose the actual valuation of the flat is 80 lakhs, and the loan amount that is to be sanctioned with the down payment exceeds 80 lakhs. And hence the loan gets rejected.
Job stability: If the applicant is a frequent job changer, there can be a possibility of the loan application not approved as the stability factor is one of very important thing in getting the loan sanctioned.
Previously rejected the application: If the home loan application is rejected for a few times, then this can be a reason.
Out of Geo Location: There are some areas where a particular bank does not sanction the loan as they are out of the geographic limit that has been set by them. So if your application is for those areas, you may face the rejection of loan Now, these were the common reasons which your bank would tell you while rejecting the loan application. Following are the reasons which the banker may not necessarily tell you before rejecting a loan.
Address on defaulter: The house you are planning to buy is already in the name of the person who is a defaulter
IT returns: you might not have filed proper Income Tax Returns and that can be a major point for rejection
Builder not approved: There are some builders whose properties cannot be approved by the banks. If you are planning to buy a house which is built by that builder, the loan is rejected. Property not approved: Sometimes banks may think that the property is not worth approving the loan because of many reasons and their calculations and that can also be a reason to get the loan rejected
Black areas: there are few areas when previously the lender had sanctioned many loans and there were multiple defaults from the same area and vicinity. And that area for that particular bank becomes a black area and if you are planning to take a loan, they might reject it and not tell you the reason either
DBR: DBR stands for debt to burden ration. It is how much debt can you take on the total income. If banks feel it is not well suited and managed one, again the chances of the application getting rejected are high.
Suppose you are planning to take an SBI Home loan and you go the bank to apply it, even they would check these all factors. Make sure what you wish to do is perfect in favor of you and your dreams that you want to chase! A house is a big thing to buy. Try your best to get the loan sanctioned to live your area.