It could be disheartening to know that your home loan application has been rejected. It could mean the end of your lifelong dream of buying your home. Therefore, it won’t be surprising if the fear of rejection makes you avoid applying in the first place. However, you must not let any fear deter you from fulfilling your dream. There are ways to enhance your chances of housing loan application approval.
Here are a few pointers that can help you avoid home loan rejections. Ace them, and your dream home would be just a few formalities away.
- Fill the form accurately
The lenders can reject your application if the details on your application form are inaccurate. Inadequate or false information is one of the chief reasons for home loan rejections. While you fill the application offline, ensure to write in legible letters. In addition, the details you provide should be accurate and updated. Your application form is the first document that the lenders look at. Ensure that it is error-free and without any mistakes.
- Maintain a high credit score
Your credit score is an important factor that lenders consider while processing your home loan application. Therefore, ensure that you have a high credit score while applying. Ideally, you must have a credit score of 700 and above to get a home loan. If you have a low credit score, your application can be rejected. Before applying, check your credit score. Also, obtain your credit report and request the bureau to rectify mistakes, if any.
- Avoid switching jobs
Lenders check your credibility and repayment capacity while processing your home loan application. Having an unstable job profile or switching too many jobs can indicate unsteady income flow. This can allow the lender to reject your application doubting your creditworthiness. Therefore, to avoid rejections, ensure that you do not change too many jobs or make a significant shift in your career before applying for a housing loan.
- Evaluate your property
To avail a home loan, you must ensure three things while choosing the property as your dream home. Firstly, it should not be in a remote location, old and dilapidated. Such property can reduce your loan value, increase the interest rate or worse, lead to rejections. Secondly, your property valuation should justify the loan amount you have applied for. It would be best to evaluate your property before you apply for a loan. If there is a significant difference between your property’s value and desired loan amount, your application can be rejected. Lastly, your property should be free from legal issues and should not be disputed. Ensure that you have a clear title.
While applying for a home loan, you must take all possible steps to avoid loan rejections. Too many loan rejections can affect your credit score adversely and hamper the chances of taking loans in future. Moreover, you must check your home loan eligibility before proceeding with the loan application.
Infographic Provided by Marketplace Homes