Getting your home loan rejected is not the end of the road, or your dream

The average saving of an Indian citizen is close to 30 % of his/her income and this saving goes in the property market. Now it is very evident why real estate companies are not willing to bring the property prices down as they are very sure that you will invest in them at any cost. Such is the obsession that we Indians have when it comes to owning a house and financial institutions definitely want to have a share of this huge pie. They are willing to share the risks with buyers and government policies and norms have eased up a lot in last few years which is a boost to this industry. But it comes with a lot of baggage and one must be totally prepared emotionally, mentally and financially before plunging into this investment.

First and foremost aspect that a borrower must be concerned is that even a tiny slip can end up in the home loan getting rejected. So there are two sides to this aspect:how to avoid the pitfalls of home loan rejection and in case it gets rejected how to deal with the same. Home loans can be rejected for various reasons and some of them can be due to the following –

• Bad credit score – Ensure that your credit score report is above the baseline which is 750 points so that lending institutions will be willing to consider your application. How to accomplish this? Pay all your outstanding credit card payments and EMIs so that the score improves.

• Job stability – Though home loan comes with collateral, the financial institutions would like to see that the applicant has a stable job as your repayment capacity is dependent on this factor. So provide ample proof that you have a steady income in case you’re not salaried employee of a firm.

• NOC for your previous loans – Make sure that you obtain the NOC for your previous loans as this will boost your credibility and financial institutions will be more amenable to your loan application.

• Accuracy in your personal details – Ensure that all the details provided by you are accurate and there are no inconsistencies. This is a very important factor that can impact your application status and each and every detail should be scrutinized for any missing element so that there is no any last minute surprise. There have been so many cases in the past where the loans have been rejected because of incorrect details provided by the applicant.

• Property Location – Land laws are so archaic in this country and involve dealing with a massive red tape. This can be really frustrating but we do not have a choice in this regard and have to abide by the rules. Applicant should ensure that the property does not have any conflict, disputes and has clear title so that banks will be willing to consider your application. It is better to involve a good property consultant or lawyer to validate the property before you narrow down to your choice.

Despite carrying out all the due diligence if you still end up receiving a rejection letter from the financial institution do not sweat because it is not the end of the road. There is always another chance and you will definitely obtain the loan by eliminating the mistakes. Dive deep into the response given by the banks for rejection and try to understand the reason and what is the gap between lender’s and your requirement and how it can be plugged. This will give you more clarity and restart your application process . Usually they may be due to the fact that the loan amount you have requested is very high and you can bring down the numbers; it can be due to less CIBIL score etc. You need to have a very objective approach with lots of patience and strong financial discipline for your application to get approved. Haven’t you heard the saying “Laughing all the way to the Bank”? Yes make it happen and good luck!