What are the top Home Loan rejections and solution
We all dream of our own home and at some point in time we reach out to loan companies for Home loans. But what if you face the huge disappointment of getting your home loan rejected again and again? Did you know that more than 40 percent of home loan applications are declined every year by a financial institution? Countless people had their home loan applications declined for one or another reason.
These rejections are however faced due to minor mistakes. Let us check what are the causes and solutions to home loan applications.
1. -Bad credit history: A credit score is a number that’s calculated based on your financial history. It’s a way for lenders to assess your risk as a borrower. If you have a good credit score, lenders will see you as less risky and more likely to repay your loan. That means they might be willing to offer you better interest rates or lower down payment requirements than someone with lower credit scores.
Loan Magic suggests you improve your credit score by paying off any outstanding debt, including unpaid medical bills, utility bills, and cell phone bills. A single missed payment on an account can have an impact on your overall credit score for up to seven years after the missed payment date.
2. No employment verification: A stable job is important for a home loan application. Banks consider job stability as one of the main criteria for granting a loan. Too many jobs in a short period can also reflect poorly on the applicant.
We suggest you be consistent with your job to avoid loan rejections. Continuity in the job also increases your rapport for future growth.
3. Unpaid Dues: The credit history of the applicant is one of the most important factors considered by the lender for approving a home loan. The credit history of the applicant is one of the most important factors considered by the lender for approving a home loan. The credit history of an individual includes all his or her financial transactions, which are recorded in a credit report. This report is generated from various sources such as banks, lenders, and other financial institutions that have had dealings with an individual.
The Loan Magic team ensures that all your dues are clear before approval of your application to avoid defaulters in the future.
4. Age Criteria: Home loan applications are rejected if the borrower’s age is close to the retirement age. The lender is hesitant to offer loans to borrowers who are close to retirement because they are unsure how long they will be able to repay the loan. The Retirement Age Discrimination in Employment Act of 1967 prohibits employers from discriminating against employees based on their age and requires them to provide older workers with reasonable accommodation.
5. Previously Rejected Loan Applications: CIBIL is the acronym for Credit Information Bureau of India Limited. Such an incident becomes a part of your credit record. Many incidents can be recorded in your credit report and these are:
- Bankruptcy proceedings
- Judgement against you
- Insolvency proceedings
- Failure to maintain a minimum balance in a savings account
- Failure to meet repayment of debts on time
- Nonpayment of EMIs on time
- Nonpayment of dues to utility service providers
6. The information recorded by CIBIL is sourced from banks: financial institutions, and other organizations. These include credit card companies, lenders, and retail stores.
The solution to all this :
Set Your Goals and Priorities: financial goals, financial priorities
Keep Track of Your Income and Spending: be aware of income and spending, budgeting
Take on Debt Wisely: debt management strategies, debt consolidation loans
Contact us for Home Loan and we will make sure that your application will not get rejected by banks. We help you get instant loans without any hassle.