To have a home with your name on it. That is one of life’s major milestones ticked off. Many apply for a home loan trying to achieve this milestone. After all, when a lender finances a major portion of the cost, buying a home become easier. But, there are occasions when we see a loan application rejected. Here are five ways to avoid that scenario.
- Keep a high credit score
A credit score represents whether you can handle finances wisely or not. Multiple credit card/loan inquiries along with bill payment defaults pull your score down. A low score reduces your home loan eligibility. Banks will reject your application or accept it with a high-interest rate. Therefore, always keep a high credit score. Pay your bills on time.
- Stable job matters
Indian parents wish their children to pursue only safe jobs. Banks agree with the parents. When you apply for a housing loan, the lender is concerned with your repayment capacity and that is way your employment history is scrutinized. A stable job at a big reputed company is preferred over frequent job changes and freelancers.
- Location is prime
Where is the property or home for your which you apply for a home loan? Has the project received all the requisite clearances? Is the builder a reputed one or a shady one? These are the questions a lender will ask before approving your request. Please pick a property which is safe and legal. The lender does not want to see you not receive possession after paying the cost. Repayment becomes hard under such circumstances.
- Age is important
Most lenders have an age limit when it comes to loan applications. Since the repayment period ranges between 20-30 years, those nearing retirement often see this application rejected. For the younger folk (early 20s), their lack of stable employment becomes an issue. Usually, lenders look for applicants in mid-20s to early 30s.
- Previous Residents
When you apply for a housing loan, ensure the previous occupants weren’t defaulters. Often banks list the address of such people in the defaulter’s list. While the ownership may change, the address doesn’t and hence banks refuse to sanction loans for such addresses.
The Finance Marketers Blog 