Are you one
amongst the many in India whose home loan has been rejected? Well, there’s no
reason to be dejected as it is not going to help matters. When your home loan
application reads as “no”, you need to read it as “try again”. There is no
reason to feel dejected as you are just an approval away from purchasing your
dream home. Below are 5 crucial steps that can help you get that dream home
after your home loan lender has said no.
Dig into the details
Usually, the
letter sent by the home loan lender conveying the rejection is a generic one.
Do not let the cloud of disappointment blur your thinking. Instead, you must
try to learn the reason for your home loan being rejected. If the letter does
not specify the reason, call the concerned officials and try to understand the
precise reason for the lender rejecting your loan application. This is very
important as it helps you prepare better when reapplying for the loan.
Reduce the loan amount
While
assessing your loan eligibility, a strong possibility of the lender rejecting
your loan application is because your monthly income is not sufficient to
support the required home loan amount. In such cases, it is recommended to
rework the loan amount so that the debt servicing ratio can be corrected, which
feel make the lender feel more confident in your loan repayment ability.
Pay off existing debts
If you
already have multiple loans, the chances of your current payment obligations
getting in the way of the home loan are high. This is because it leads to a
higher debt to income ratio. Simply put, this means that your debt obligations
and repayment commitments are higher than your existing income. And the lender
feels that more debt obligations will increase the chances of your defaulting
on the payment. The best alternative here is to pay off a few of the existing
debts to rectify the situation.
Work on your CIBIL score
Lenders rely
on CIBIL score and CIBIL report, as it helps them understand your credit behaviour
and credit history. A delay in repayments and defaults result in negative
impact on the CIBIL score and a poor score is most often the main reason for
home loan rejection. In such cases, obtain a copy of your CIBIL score and seek
professional advice on how you can improve it. Remember, it takes time for the
revised scores to reflect, so the better you begin to improve your CIBIL score,
the more favourable are your chances of getting a home loan approved.
Adjust to make it work
The home loan amount,
rate of interest and loan tenure are the main factors considered when it comes
to home loans approval. Your EMI is calculated on these factors. Now, for the
EMI to be worked out for your income; either the home loan can be decreased or
the loan tenure can be increased. Consider all available alternatives too such
as another property that is more affordable or other home loans that offer
better interest rates.
When
applying for a home loan, the key lies in understanding the home loan lender’s
requirements and working towards meeting it. A little bit of patience,
financial discipline and determination is all it takes to get your home loan
sanctioned with minimal effort.
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