Why Home Loan Application get Rejected

While preparing your home loan application you think about everything. You do your research; you check your credit score, the documents required for home loan. But do you think about why, despite doing all the necessary things, your loan application might still get rejected?

With the disposable income of the working class increasing day by day and property providing a great investment opportunity, the number of people applying for home loans is ever increasing. The A lot of times, despite being in a good credit space, having a good stable monthly income and doing everything else right, your home loan application may still get rejected. 

Here are a few uncommon reasons why that might happen:

1.    Builders today, have tie ups with banks. If the builder you’re seeking a property from, is not in a tie up with your bank or isn’t approved by your bank, your loan may get rejected. It’s a good idea to check with your builder about which banks he has got approvals from.

2.    A builder may figure in a bank's list of approved builders, but a specific project launched by him may not have been approved by the concerned bank. In addition, there are likely to be cases where particular phases of a project may not have bank approval. So before applying for your home loan it’s extremely important to check with your builder about all these approvals.

3.    In the case of resale property, if the buyer and seller mutually decide on a price for a property and the buyer seeks a loan, the bank or loan provider re-evaluate the price of the property and if the value is lower than the price decided by the buyer and seller, the loan stands a chance to be rejected.

4.   Defaulters are blacklisted along with their properties by banks and housing finance providers. If you happen to live in a house that has been blacklisted your application may be rejected.

5.      Your job stability is extremely important when you apply for a loan. Some banks even insist that you need to be employed with a concern for at least three years to be eligible for a loan.