At one point of life, you make up your mind to take a home loan and purchase a home. You will be all set dreaming of owning a home after you ensure that you fit in the eligibility requirements of the lender and have all documents in place. Surprisingly, you hear rejection from the lender which is very disappointing. Should you stop dreaming of owning a house with the help of housing finance? What is your next step after facing the rejection? Don’t just blindly approach the new lender for the loan approval; the answer from the next lender will be same which will reduce the chances of getting loan further. Instead, you should dig into the reasons why the home loan is rejected and make necessary corrections to improve the chances of the approval.
What Should You Do If Your Home Loan Is Rejected?
Dig out the reason for rejection
Don’t just get disappointed with the rejection of home loan application. Work out on knowing the reason for application rejection from the lender. In most of the cases, banks give a generic reason for rejection of the loan. When you are not aware of a specific reason for the rejection of the loan, contact the officials to know the precise reason for rejection of loan.
Match the loan amount with repayment ability
Your repayment ability may be one of the major reasons for rejection of your home loan application. The lender may feel that your income is not sufficient to repay the loan comfortably. If so, rework on the loan amount based on your income level and improve the chances of loan approval.
No to debts
A person having 6 digit salaries may be surprised when they face rejection for the loan application. Apart from assessing your repayment capability based on your earnings, the lender will also look at your debt portfolio. If there are any loans that are due for the payment or if the debt rate is high, the lender may deny the loan application because the current loan will multiply your debt further and the lender will be doubtful about your repayment capability.
Have good credit ratings
CIBIL score is one of the key factors considered by the lender in approving the loan, this CIBIL report gives insight to the lender about your credit behavior. There should be no delay in the payment of the credit bill or loan EMIs. Any delays in the same will impact the credit rating which often most important reason for the home loan rejection. It is important to maintain good credit record and take a professional help to improve it further.
Many other factors like EMI, loan amount repayment capability other deciding factors of the home loan approval. To make the EMI work for you, you can either decrease the loan amount or increase the loan tenure. Another possibility of getting your loan approved is to search for the home that is more affordable.