Home loans are probably the biggest financial commitment one makes in their lifetime, with huge loan amounts and long repayment tenures usually stretching up to 30 years involved in the process. However, given that lenders generally put in place a wide range of parameters while evaluating your home loan application, failure to qualify for even one parameter can lead to your application getting rejected. When unsure about the eligibility and approval chances of your home loan application, you can contact the customer care of top lenders like Axis Home Loan Customer care and HDFC Home Loan Customer care, as these will give you better insights into the process.
Besides this, one can ensure that their home loan application gets approved by understanding and keeping in mind these common reasons for home loan application rejection and how to avoid it:
Low credit score
With the rising importance and significance of credit score, it has not only become one of the most important parameters for evaluating one’s creditworthiness but is also becoming a basis for determining the interest rate to be levied on your loan. Enquiring Axis Home Loan Customer care before submitting an application would assist in knowing the importance of credit score and whether your current credit score and profile makes you eligible or not for approval. Possessing a strong credit score indicates disciplined credit repayment behaviour, which not only boosts chances of loan approval but also enables the borrower to avail of lower interest rates. On the other hand, having a low credit score implies indiscipline in repayment of loan EMIs and credit card bills, which may lead your lender towards either rejecting your home loan application or lending you at a relatively higher interest rate. Upon checking your credit report before submitting the home loan application, it would be prudent to contact HDFC Home Loan Customer care to get a fair idea about your eligibility and approval chances as per your existing credit score.
High FOIR
While evaluating your loan eligibility and repayment capacity, another parameter that lenders factor in is your existing fixed obligation to income ratio, which is the proportion of your income currently being used for repayment of mandatory expenses like loan EMIs. In case your FOIR breaches the 40-50% mark, lenders may hesitate in lending to you since a higher FOIR indicates that a major proportion of your income is going out for mandatory debt repayments, implying a higher likelihood of defaulting in future. Therefore, to avoid getting your home loan application rejected, make sure your FOIR does not breach the 40%-50%after taking into consideration the proposed loan’s EMI as well. If you are unsure about your FOIR and whether it falls in the lender’s eligibility criterion, feel free to connect with Axis Home Loan Customer care to know the eligibility and further process involved in a home loan application.
Unsatisfactory Characteristics of property
Since home loans are secured against the property for which you are availing the loan, lenders practice due diligence while evaluating your property. Before approving your home loan application and sanctioning your loan based upon the property’s value and LTV ratio, lenders consider factors such as the location and age of the property. Remember to enquire with HDFC Home Loan Customer care before finalizing and submitting an application. Contacting them can assist in knowing whether your property is eligible to be pledged and taken a home loan against. Keep in mind that lenders may reject your loan application if the residual age of the property, which is the expected residual life of property on loan maturity, is less and if the property does not fall into the geographical limits defined by them.
Age of borrower does not fit in eligibility criterion
While determining your home loan eligibility, connecting with Axis Home Loan Customer care
would let you know and understand that both your current age as well as your age at the end of loan tenure are factored in by the lender. Generally, lenders prefer completion of loan tenure by the time the borrower retires since the regular inflow of income would cease post-retirement.
Since the younger generation of borrowers has a higher number of active work life years left, their eligibility for a long-tenured loan of up to 30 years is higher in comparison to someone in their mid-40s or 50s. If you are advancing towards your retirement time & wish to avail of a home loan, consider enhancing your loan eligibility by adopting measures such as adding a co-applicant and contributing higher downpayment.
In case you are approaching retirement age, consider adding co-applicant such as your earning children or spouse to increase the chances of loan approval.
Weak/Risky Employer’s profile and frequent job-hopping
Your job and your employer’s profile may also have a bearing on your home loan application. Usually, government sector employees and those working with reputed corporates are preferred due to their higher job certainty, instead of those who have unstable income, such as freelancers.
Additionally, the practice of frequent job-hopping for higher income and better career prospects has become common, especially amongst young earners. When you contact top lenders like HDFC Home Loan Customer care, you are likely to understand that this practice of shorter employment stints is seen as a sign of an unstable career, and hence, lenders may consider such people as more prone to the risk of defaulting in future, thereby leading to loan rejection. Hence, one should time their home loan application smartly and plan in advance for the same.
Improper documentation
Another common yet crucial reason behind home loan rejection is the absence of adequate documentation. As proper documentation is vital for a loan application’s processing and approval, always ensure to contact Axis Home Loan Customer care
to ensure you are ready with adequate documentation to get the application approved. Not being able to timely submit the required set of documents when applying for the home loan will certainly lead to its rejection. Before going ahead to submit your home loan application to any lender, always ensure to be prepared with the required documents. This eases the process, and your chances of loan approval get boosted with the right documentation.
Not fitting into the minimum income criterion
Many lenders set minimum income criteria for loan applicants when evaluating their home loan applications. Income is often the first filter that lenders put in when an applicant applies for a home loan after enquiring with HDFC Home Loan Customer care regarding the eligibility criterion. These income criteria may also vary as per the applicant’s location. For a person living in metro areas, the minimum income requirement might be more than that required for someone residing in rural or semi-urban areas. Those who do not meet this criterion usually face outright rejection of an application.