You are given a home loan when your own eligibility (mainly financial reasons) along with your property eligibility matches with the policy of the lender. We are going to talk about reasons why your eligibility to get a home loan is questioned by the lenders & they may reject your application.
1. Processing Fee cheque getting bounced – Whatever the reason, Bankers are really sensitive about the Processing Fee cheque and its considered very sacrosanct. Ensure your account has enough funds for it to be cleared.
2. Financial Eligibility – As a thumb rule, it can be assumed that a salaried person can have 50% of his net salary & a self-employed person can have 75-80% of his monthly income, paid as EMIs for any loans. If you are already paying substantial EMIs, more than what your finances can afford, your application may be redirected.
3. Guarantor to someone else's loan – OK so you became a guarantor to someone's loan. In the eyes of the lender, it is as good as you taking a loan. So be cautious while doing this.
4. Age of the property – Yes, the lenders do believe in age of the property. They will not fund a property they believe would not stand for 35-40 years. Strange !! This is how it happens.
5. Your contribution – Lender requires minimum 25% of total value of property to come from your side. Any lesser and he starts getting jittery.
6. Too many co-owners – To counter the point above, you may want to add more co-owners so that your eligibility goes up but the lender does not like to have too many co-owners as well.
7. Co-owned property with not so-close a relative – EG. A property co-owned with a friend. Lender says, thank you Sir – we will not be able to fund it. Co-owned with unmarried daughter, cousins, collections – lender is likely to reject the application.
8. Change in the career – Bankers are conservative and it is good for the economy. They do not like risk-takers like a person who is in between between changing jobs or someone who has left the job to start on his own – they would rather wait on the sides so that you get stable before they fund you.
9. Education Qualification & Work Experience – They may not say it specifically but deep down in some page of the policy there are restrictions given your education status. An under-graduate is less likely to be job stable and that poses a potential risk for the lender. Similarly, if you are hopping jobs too soon or are very new on the job, your chances of getting a home loan may decline.
10. Your employer may not be worth his salt – You are working for some firm which is not known in the market. The lender may ask you to get the financials of that firm.