Buying a house is 1 of the most important decisions of anyone’s life.
It’s a dream of everybody to have a house of their own. Nonetheless, it is not possible to buy their houses using their saved finances.
The facility of the home loan has cropped up as an indispensable solution to fund a new home.
But many a time, some people don’t consider a few vital things and have their applications rejected by lenders.
What’s next to do when your home loan gets rejected to get faster approval?
Read on and explore more!
Try finding out the loan rejection reason.
When your home loan application gets rejected, there is no specific reason why a bank or an NBFC is doing it. But, if you want, you can always reach out to your lender and know the exact reasons. It will help you plan for your next loan with much confidence.
Reduce the loan amount
Applying for a large amount without adequate support is a top reason for home loan rejections. If your home loan is rejected due to this reason, you can reduce the loan amount and convince the lender that you can repay it on time. The lower is your loan amount, the reduced will be your home loan interest charges as well.
Ensure paying off existing debts
If you have different loans on your head, your housing loan application may be rejected. It is because your lender may not be convinced that you can make timely repayments. Thus, the best thing is to pay off ongoing loans and ensure your income can support the upcoming loan EMI. The lesser notes you have, the higher are your chances of getting your housing loan sanctioned. Utilizing the home loan EMI calculator, one can compute an exact payable EMI amount. This way, one can indulge in proper financial planning.
Put down a considerable down payment.
Most lenders won’t approve the entire value of your home that you want to buy using the housing loan. The maximum that most lenders may sanction is 75-80%. The remaining has to be arranged by a borrower on their own. It is called a down payment. Hence, if you can put down a large down payment amount, it may help you get the loan approval. It is because it may convince a lender that you are financially stable. In turn, it may help you get the housing loan approval faster.
Get a co-applicant or guarantor on board.
If your credit score is not higher, you can get a co-applicant or a guarantor or board having a higher score and a stable income. In turn, it can improve your home loan approval chances. But before asking anyone to become a guarantor or a co-applicant, ensure that they are aware of the risks involved.
Check your CIBIL score and make efforts to enhance it.
Before applying for a housing loan, you ought to ensure having a robust credit score. A poor credit score is among the vital factors leading to home loan rejections. Therefore, you should check your credit score in advance. It will help you get a fair idea of whether your home loan application will be approved or not. You can also check for possible errors in your credit score and dispute them. In turn, it can help you to resolve them earlier and increase your credit score. Making timely repayments towards your existing loans and credit cards can elevate your score by a fair margin. A CIBIL average of 750 or more is what top lenders want you to maintain. The higher is your score, the better is your chances of getting the loan approval.
Check if any important documents are missing.
Your home loan demand may also get rejected if some important loan documents are missing. Thus, the best thing is to ensure having an entire list of housing loan documents ready. There should not be any documents missing to make lenders assume that you are any less capable loan applicant. The entire list of home loan documents is mentioned on the creditor’s website you want to apply with. This way, you can be sure to avoid any possible rejection reason and get speedy approval.
If you can consider the pointers discussed above, you can avoid possible home loan rejection and even enjoy an easy approval.
Are you a home loan applicant and managing a higher loan rate?
It is also possible to switch your home loan to a new lender offering a lower rate. It is done via a home loan balance transfer to save big on interest charges and EMIs.
You can also avail of home loan tax benefits on repayment made towards the principal, interest, and more.