You are given a home loan when your eligibility (mainly financial reasons) along with your property eligibility matches with the policy of the lender. We are going to talk about reasons why your eligibility to get a home loan is questioned by lenders & they may reject your application.
1. Processing Fee cheque getting bounced – Whatever the reason, Bankers are sensitive about the Processing Fee cheque, and it’s considered very sacrosanct. Ensure your account has enough funds for it to be cleared.
2. Financial Eligibility – As a thumb rule, it can be assumed that a salaried person can have 50% of his net salary & a self-employed person can have 75-80% of his monthly income, paid as EMIs for any loans. If you are already paying substantial EMIs, more than what your finances can afford, your application may be rejected.
3. Guarantor to someone else’s loan – OK so you became a guarantor to someone’s loan. In the eyes of the lender, it is as good as you taking a loan. So be cautious while doing this.
4. Age of the property – Yes, the lenders do believe in the age of the property. They won’t fund a property they believe would not stand for 35-40 years. Strange!! This is how it happens.
5. Your contribution – The lender requires a minimum of 25% of the total value of the property to come from your side. Any lesser and he starts getting jittery.
6. Too many co-owners – To counter the point above, you may want to add more co-owners so that your eligibility goes up but the lender doesn’t like to have too many co-owners as well.
7. Co-owned property with not so close a relative – EG. A property co-owned with a friend. The lender says, thank you Sir – we will not be able to fund it. Co-owned with an unmarried daughter, cousins, and colleagues – the lender is likely to reject the application.
8. Change in the career – Bankers are conservative and it is good for the economy. They don’t like risk-takers like a person who is in between changing jobs or someone who has left the job to start on his own – they would rather wait on the sides so that you get stable before they fund you.
9. Education Qualification & Work Experience – They may not say it specifically but deep down on some page of the policy there are restrictions given your education status. An undergraduate is less likely to be job stable and that poses a potential risk for the lender. Similarly, if you are hopping jobs too soon or are very new on the job, your chances of getting a home loan may decline.
10. Your employer may not be worth his salt – You are working for some firm that is not known in the market. The lender may ask you to get the financials of that firm.