This might be a good time to buy a dream home as prices of the properties are coming down. If you do not have enough money to buy a home, you can avail a home loan. Availing home loan is very important as it involves a lot of research and you need to submit many documents. Before applying for a home loan, you must know the reasons for rejection of your home loan.
If you do not pay your credit card dues on time, there are chances of your home loan getting rejected. One of the important factors that are considered while granting a loan is your credit history. In case you fail to pay your credit card bills on time, this will be reported to the Credit Information Bureau India Limited (CIBIL) by the bank. This will affect your cibil score and banks will not sanction a loan, if you have low cibil score. So make sure you pay all your credit card dues on time.
There are many other factors which affect your credit score. If you have availed too many loans which you are struggling to repay and applied for home loans from different banks, banks think that you are credit hungry and this might affect your credit score. As I said earlier, if you have a bad credit score, banks will immediately reject your home loan application.
See Also: Tips For Home Loan EMI Repayment
You will be sanctioned a home loan by the bank, only if they are 100% sure that you will repay their money. If you keep switching jobs very often, this will be poorly reflected in your home loan application. When you apply for a home loan, you must have a stable job and good income. Banks want you to be working in a reputed company as it gives them confidence that you will repay the loan.
If you have availed many other loans, banks will calculate your actual income by subtracting the loan repayments (EMIs due) from your income. Your home loan application will be rejected, if your repayment capacity seems inadequate.
If you stand guarantor to your friend's loan, and if he defaults in this repayment, you have to repay the loan on his behalf. The bank considers both you and your friend, as defaulters. So you must be very careful when you stand guarantor to a loan. You must stand guarantor, only if you are sure that the borrower can repay the loan.