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Reasons for Home Loan Rejection – Dealsofloan

How it feels when a person searches for a home after a great effort, which includes  lots of searching and spending lots of time in research for the best fit flats and upon approving for the home loans, the application gets rejected. Many times, people tend to get in return several unique reasons and uncommon ones that are furnished by the lending parties as the reasons for the home loan application rejection.
There are several uncommon reasons for your home loan rejection, which has been collected through various reports and resources. Here, we are going to discuss those reasons, which may prove to be a hindrance towards the approval of home loans application, even after meeting all eligibility criteria of the loan seekers.

#1. Unauthorized Properties
Unauthorized builders and their property is one of the most prevalent reasons in India, for the home loan application rejection. It’s now becoming more common these days, that when you approach a particular bank for home loan approval, you may be furnished an information that the concerned property is not authorized by the talked about bank. This may not add huge trouble for you and may not shatter your dreams of owning a particular property, but still you have to approach a different bank to serve your purpose of the home loan. Always remember that not all banks, approves all properties and it depends on the criteria and sole discretion of the bank.

#2. Unauthorized Builders
There may be some conditions, when some particular builders are not authorized through the banks. Every bank maintains its own list of approved and unapproved builders and one needs to approach a particular bank to know, if the chosen builder is approved by the concerned bank or not. In case you are not having the result of your own will, you need to approach the other bank to know, if the other bank approves the concerned builder.

#3. Valuation Related Rejection
There are many times, when the rate of the property is mutually decided by the seller and the buyer. In such case, the evaluation is purely as per mutual agreement and has nothing to take with the market price. However, when you approach a particular bank, it’s the evaluation process of the bank, which is the sole decider. If the bank evaluates the property, much higher than the rate as decided mutually, there is no problem at all. But, if the decision goes against you, here begins the trouble.  In such case, the bank decides to decrease the loan amount to be sanctioned to the loan seeker and in further case, may also reject the application for your home loans.

#4. Defaulter List
Consider a scenario, where the property you are aiming at is already on a defaulter’s list. In such case, the application may get into the rejection. There may be instances, where the particular property is not under the defaulter’s list, but still you are facing the decline of the loan application. This may be because, even if the property is not under the defaulter’s list, but the locality where the property is located is not under the good books of the bank; thus resulting in the bank rejecting your home loan application.

#5. Credit History
Many times, people tend to meet all eligibility criteria, except one; the Credit History. A survey suggests that more than 92% of the people are unaware of the credit history at all, while around 85% of the people who were a part of the research even had no idea of the credit bureaus and as such score. Such scenario may often result in the loan rejection. This is because, the credit history of the people has never been paid attention at by the person concerned.
Some results also show that around 79% of the people bearing a score of 750 and more are only able to get the home loan approved. Thus, in a way it shows that around 21% of the people still are deprived of the home loan, even after completing the eligibility criteria of all kinds.

#6. Number of Dependents
In India, where the joint family is the main culture of the people lifestyle, there are conditions, when a large number of people are dependents on a single persons income. Thus it increases the liability to the person who is seeking a home loan, which may result in the decline of the home loan applications. The number of dependents play a vital role in the approval or discard of home loan applications and most often is the deciding criteria in a person’s home application.

#7. Self Employed Status
There are some cases, where being self employed may also create a trouble for you. Self employment may be interpreted as unstable source of income and thus may create a sense of insecurity and instability in the banks for the person concerned. More importantly, if you are new to the self employment, you are more certain to see your home loan application being rejected. However, in case, you are stable for three or more years in your self-employment, there are cases, when the loan applications will be welcomed with open hands.

#8. Processing Fees Cheque Bounce
This is one of the most common mistakes, which people seeking home loans are observed practicing. The processing fee cheque bouncing out, may send a clear message to the concerned bank that the person is more likely to default on the repayments. So, take this step in the more cautious manner and show yourself as a credit worthy in front of bank. Also, keep in mind that the signature mismatch often results in the cheques being bounced out.
There are several factors, which may result your home loan applications to decline. With several factors, playing a key role in either approval or rejection of home loans, make sure everything goes well with regard to home loans. Increase your chances of home loans approval with careful steps and avoid committing silly mistakes.

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