Applying for a home loan and getting it approved is as difficult as finding a home. One slip in the long, tedious process, and you run the risk of getting rejected. Then you have to start it all over again, with lesser odds in your favour, because the rejection is recorded in your CIBIL score and it weighs on you future applications as well.
So before you start the process make sure you have taken care of everything that can stand in the way of your approval. Thus, here is a list of probable reasons your home loan can get rejected:
Banks and financial institutions maintain a list of defaulters. If a lot of people in your vicinity have failed to repay a loan, then you are more likely to get rejected. In this case, all you can do is, rent a home elsewhere.
You were unavailable for verification multiple times
When you apply for a home loan, make sure you provide the bank with a contact number on which you are available most of the time. If you miss their verification calls a couple of times, you chances of approval might fall.
You just switched jobs
One of the most important factors for approval is your stability. A lender is more confident about giving you a loan if you have completed at least one year with your current employer. Sometimes, the minimum requirement is three years with current employer.
Your job itself
As mentioned earlier, your financial stability is very important for the bankers. Thus, if they find that you are working for a firm which is not even a year old, they are likely to reject you. Your application might also get rejected in case the future of your company does not look bright to the lender.
You don’t pay your bills on time
Even one over-due bill may mean doom for your home loan application. So before you apply for one, make sure all your phone, water, gas, electricity, credit card bills are paid well before due dates.
Your sign does not match
If you use more than one signature then ensure that you use the one single sign throughout the loan application. Also, attach only those documents which have the same signature as the one you used for the application.
You backed a defaulter
Be cautious, when you become a guarantor for a friend or a family, because if they don’t repay the loan, it hurts your chances of getting a loan in the future too.
If you are applying for a loan with someone, their CIBIL score and other records will also affect the bank’s decision. Also, banks seem to reject joint loans applied for by sisters, brother and sister or friends.