We find a property to be our home with lots and lots of hope and then we further process for the home loan to give a shape to our dream. To the best of our knowledge, we collect and submit all the required documents and then wait for the positive response of the lender’s end.
But to our surprise, the home loan application gets rejected. What? Why? How? Lot many questions starts storming in our head and this is the time when we feel little disappointed. Disappointment is not only for the application rejection but also for the different unknown reasons behind it. You start worrying that you would not get anywhere.
The following tips will help you to handle this situation as single rejection doesn’t mean that you will not be able to get a home loan for life. This is not the time to get discouraged but to take a right move.
This is the first step you should take, without any hesitation ask your lender what went wrong. The best way to start working is to know why your home loan application got rejected or if the eligibility criteria do not match. As the home loan application was minutely analyzed by the lender, you can get all the answers to your queries and also find the right reason for the rejection. This will help you find the solution and reapply for the loan.
While collecting all the supporting documents if you come across that any paper is missing and this is the reason for the loan application rejection, take a legal advice. There is always a solution to the problem, so this means there can be a solution to the missing document too. No Banks/ NBFC or any other financial institution wants to lose their customer so they are always ready to support, guide and find an alternative for you as long as you are ready to honor your contract.
The home loan amount is calculated on the market value of the property, as reflected in Loan – To – Value. Different norms are followed by different lenders but mostly it is about 80% of the market value of the property. Therefore, if you are sure that your property is undervalued by the lender (the outsourced technical agency), you can get the valuation done by yourself and submit the technical report at the time of reapplying for the home loan. You can also think of proving any additional security too.
Generally the loan rejection letter given by the lender is a generic one and does not give the proper details of the reasons behind the rejection. Once you discuss the details with the lender and find the exact reason for it, dig deep into the details to know more and take necessary steps to rectify the problem. You should focus on the problem without losing your hope.
If the problem behind the loan application rejection is the loan amount that you have applied and the calculated loan eligibility. This means the monthly income is not sufficient enough to bear the burden of EMI’s and you can ask the lender about lowering the loan amount. This may help the lender to find a possibility within the Bank’s/ NBFC’s prescribed norms and limits. For example, the debt servicing ratio can be worked out so that the lender is confident and sure about the repaying capacity of the borrower.
Your current secured or unsecured loan can block the way of home loan approval. The Fixed Obligation-to- Income (FOIR) is increased due to the current EMI’s paid by you on your existing loans. This means that your monthly income and your monthly repayments and obligations are highly related. You must reconsider your decision to continue with your existing loans especially those which are near to their closing dates.
If the reason behind the rejection of your home loan application is your CIBIL report, get the report from the lender (it is chargeable). The physical report in your hand will help your to study the problem areas and rectify it with the corrective measures. A CIBIL report can be updated by login the website. In case of any wrong information being reflected in your report, in your name, you can report this on the website itself. It takes 40-60 days for the updation. The supporting documents will help you in case of any discrepancies in your CIBIL report.
The above article includes the inputs given by Akhil Jain. He says that no financial institution rejects your home loan application without any solid reason behind it. And if there is a reason there is a solution too. You can always contact the experts from Mudra Home to get a solution to your problems.