Home Loans are a matter of serious concern. As good as owning house sounds, the complexities involved just make it undesirable.
Firstly the documentation is one of the lengthiest processes. After that, the repayment through monthly loan is equally stressful. Keep aside all the pain and stress, the desire to own a home makes it all worth it. That’s the reason why even though Home Loans come with such struggle, people apply for Home Loans.
Now after having understood the basic functioning of how the Home Loan works it is essential that you know about the difficult aspects of obtaining Home Loans. There are various problems that arise which make it difficult for you to finance your dream homes. Moreover, the only option that you realistically have apart from cash payment is borrowing a loan from the bank.
Cash payment isn’t realistic option for many of us and borrowing loan from the bank isn’t easy. There are several things you need consider before you apply for a Home Loan. A failure to do so will lead to a loan request being declined by the bank or another lender.
Communication with the bank: Be clear about the borrower-guarantor relationship. Stay up-to-date with the bank. Let them know if there is any address change. And various other reasons which affect the loan are to be notified to the bank. CIBIL score is impacted by the lack of communication. And it takes a long time to revive the CIBIL score. Thus communicate with your bank on a timely basis.
Avoid defaulting your credit card: One of the major reasons for Home Loan rejection is that your credit card has defaulted a long time back. When you are looking to applying for a Home Loan, make sure that your payments are clear and you keep your credit standing favorable and within the trust limit of the bank. Credit card defaulting is one of the major reasons for Home Loans getting rejected.
Clear outstanding loans: Banks are reluctant to grant Home Loans to individuals who have an outstanding loan. Thus it is essential to clear your outstanding loan before you apply for a Home Loan. Outstanding loans are a liability not only to the borrower but to the banks as well in case if they grant the loan. Thus they do not entertain it.
Earlier tenant: When a bank defaults a person, then along with that even the address defaults. Thus make sure that you notify the bank about the same – That the tenant must have defaulted and now you have come to stay at your current place again. It may be that your loan application is getting rejected because of his credit standing. Thus avoid this mistake by notifying your bank about the same.
Collect NOC from the previous lender: This is the most important step. You might have repaid a lot of installments over the years. It is pretty essential that you collect the NOC from the previous lender. NOCs are essential as they act as a proof of the payment. Thus obligations aren’t done unless you collect NOC.
These are the basic reasons for Home Loan rejections. So ensure to take precautions in order to avoid your Home Loan from being rejected. And taking proper care will help you in your pursuit of a dream house.