You are granted a home loan when your eligibility (primarily for financial reasons) and your eligibility for the property matches the lender’s policy. We will talk about the reasons why lenders may question your eligibility for a home loan and may reject your application.
1. Bounce a processing fee check – Whatever the reason, bankers are really sensitive about a processing fee check and it is considered a very sacred thing. Ensure that your account has sufficient funds to be liquidated.
2. Financial Eligibility – As a basic rule, it can be assumed that a salaried person can get 50% of their net salary and a freelancer can get 75-80% of their monthly income, paid as EMIs for any loans. If you are already paying large EMI loans, more than your finances can handle, your application may be denied.
3. Guarantor of someone else’s loan – Well, so you became a guarantor of someone else’s loan. In the eyes of the lender, it is a good idea to take out a loan. So be careful while doing this.
4. Life of the property – Yes, lenders believe in the life of the property. They won’t finance a drug that they think won’t last 35-40 years. strange!! That’s how things happen.
5. Your Contribution – The lender requires a minimum of 25% of the total property value to come from your side. Any less than him and he starts to tense up.
6. Too Many Co-Owners – To counter the above point, 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 either.
7. Shared property with a not-so-close relative – EG. Shared property with a friend. Thank you, sir, the lender says – we won’t be able to finance it. Owned jointly with an unmarried daughter, cousins and colleagues – the lender is likely to reject the application.
8. Change in profession – Bankers are conservative and this is good for the economy. They don’t like risk takers like someone between changing jobs or someone who left a job to start on their own – they’d rather wait on both sides for you to settle in before they finance you.
9. Educational Qualifications and Work Experience – They may not say that specifically but deep within a page of the policy there are limitations due to your educational status. A graduate without graduation is less likely to be stable in employment and this poses a potential risk to the lender. Likewise, if you’re job hopping too early or you’re too new to the job, your chances of getting a home loan may drop.
10. Your employer may not be worth all this money – You work for a company that is not well known in the market. The lender may ask you for that company’s financial statements.