Home loan application rejected

First thing to do if your home loan application gets rejected is, to relax. Because there are ways to figure out and get it done.

Usually, a home loan gets rejected for the following reasons.

Reasons why a home loan application is rejected.

Credit Score : The foremost reason for your home loan application to be rejected is your low credit score. For availing any loan, you should have a good credit score. Any lender, either a bank or an NBFC go further with the loan process after checking the borrowers credit score. So, if the credit score is low, the home loan application gets rejected in the first step.

Eligibility Criteria : If the loan amount applied is more than the eligibility, the process might terminate stating you don’t meet the eligibility criteria. The loan is usually sanctioned based on your source of income and the amount of income you get. Home loan application gets rejected if the lender feels that you cannot bear the EMI.

Valuation Of the Property : The next step is evaluation of the property. Sometimes, even if you are eligible for the applied loan amount, your property might value less than you had applied for. In such cases again, the home loan application gets rejected.

Processing Fee Cheque Bounce : You have to pay the processing fees in the form of cheque. If you have no enough amount in your bank account, then the cheque gets bounced. So, if the cheque gets bounced, the agent gets back to you with a rejection message.

Other Reasons : If there are any transition changes in your life say you are in between two jobs, or you are turning to be a new entrepreneur from an employee working for a company, or you are working for a small company, or having minimum work experience, all these might lead to a home loan application rejection.

Reasons w.r.t People : Sometimes, your co-owner is not the person mentioned in the lenders’ conditions, or you are a co-owner or guarantor to someone else (not a problem if your credit score is good and you reach your eligibility), or you have too many co-borrowers for your property or you have too many independents on you, or you hold a too old property, any of these reasons can reject your home loan application.

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Home Loan Application Rejected? Here are the solutions.
Solutions For Home Loan Application Rejection :

Firstly, relax and go through the reason why your home loan application is rejected.  Then act accordingly. In India, it is possible if you apply for a home loan immediately after the rejection, provided you take the required steps and rectify the reason with a proper solution. Hence, let us look into the solutions for the respective problems.

Credit Score : Check your credit score before you apply for your home loan. If you have  a low credit score, see to it that you get it right by clearing all your pending credit card bills or by paying old debts or by removing your name as a guarantor or co-borrower if you are for anyone.

Eligibility Criteria : If this is the reason, then you should look at reducing the loan amount. If you require so much amount for loan, try applying after your increment. Or increase the tenure and reduce the EMI of any existing home loan or personal loans if any as this will increase the income in hand which will ultimately increase your eligibility.

Valuation of the Property : Before you buy a house, you should have the valuation details. If the valuation estimate by the lenders is less than what you had estimated, then the loan amount you had asked for will not be sanctioned. This happens only when there is a huge difference between the estimates. But if this is the reason, then you can try with different lenders as each lender’s value has a slight variation. Or if you want the same lender then you apply the loan again by reducing the loan amount.

Processing Fees Cheque Bounced : In this case, usually your agent immediately informs you. So, see to it that you start the home loan process or you give a cheque dated in the beginning of the month as it is sure you have enough amount in the account in the beginning of the month than at the end. But see to it this never happens again.

Other reasons : For all other reasons, the transitional changes, you have to wait till you meet the lenders’ conditions. Any lender asks for three months pay slip if you have a change of job. If you have a start-up or if you are working for a start-up, the start-up should have good investors or it should be running in profits. If yo need the loan immediately, you ca try with the NBFCs which are a little lenient with the rules. But note that the interest rate is a little higher than the banks.

Reasons w.r.t. People : Having more independents is really a serious problem. If you reduce the loan amount, probably there are chances of getting the loan. Firstly, you should figure out if you can really manage your EMIs and run a family with your income. The better option is to wait till your increment and then apply. Though you might go with the NBFCs, you might have a tough time managing. If your home loan application is rejected because of too many co-borrowers, then you can choose two out of all of you who has more eligibility and then apply for the home loan. though legally the home loan is on the two chosen ones, you all of you can share the EMI. Ensure that you are in good terms till the end.

The mantra for your loan to be processed is just follow the minimal conditions by the lender as they are lending really huge. Don’t panic. No pain no gain. So, think and take the next step as any more rejection in the application will affect your credit score.

Loanyantra.com is always there to help you and suggest you for a doable job. You can take our guidance and get the loan as customised also at lower interest rate. All you have to do is just inquire in our website. We will do the rest. Happy Home Loaning.

 

 

SBI Home Loan Process – Step by Step

Searching for the best home loan is as important as searching for a dream home. You might find the best home loan lender, but the process involves many steps. You have to be patient and careful while dealing with the process. Though applying online has become very easy, reaching the disbursal stage is no cake-walk. If you had chosen a nationalized bank, you have to be even more careful in following each and every step.

Here is the step by step procedure for your SBI home loan disbursal.

  • Collecting the Property related Documents
  • Legal Opinion
  • Property Valuation
  • E-stamping
  • Submitting the Application
  • Documentation
  • Disbursement

1.Collecting the Property Related Documents:  Firstly, go to the builder and get all  the property related legal documents. Get the Legal opinion and Share of agreement and Sanctioned Site plan from the builder.

Collect : Booking Receipt along with the copy of the cheque.

2.Legal Opinion: Go to an Advocate who is in the SBI Panel with the documents in step 1 to get it verified. For the advocate to give the final legal opinion he needs to see the Sales Agreement & Construction Agreement and he needs a photostat copy of it.

Normally if its a builder share following documents need to be collected from the builder :

a. Encumbrance certificate till current date (from some 35 years advocate may ask)

b. Tax Paid receipt till date. Lawyer might ask you for multiple documents, so the maximum delay is expected at this step. Once this step is done, half part is done.

Collect : Legal opinion

3. Property Valuation: Once the Legal valuation is done, go to a property Valuator who is in the SBI Panel with the sales agreement. He valuates the property and gives a letter.

Collect : Valuator statement

4. E-stamping: SBI mandatess the Sales agreement and Construction agreement to be estamped/Franked.  Regarding whats the value to which e-stamp, do concern the branch staff. Normally for a ongoing construction flat, there are 2 Agreements a)sales Agreement and b) Construction Agreement. E-stamping and franking are actually the same, e-stamping is the new technology where as franking is the old one where we stamp it, Franking can be done only at register office where as e-stamping can be done at post offices, Syndicate banks, Selected registrar offices, etc.

Note: Make sure you, your wife and builder sign on the e-stamp which you purchase.

Collect : e-stamp and franking on the sales agreement

5. Submitting the Application: Once you get the valuator statement and Legal opinion, go to the SBI with the filled in application forms along with the required documents for loan application. Also attach the legal opinion and the Valuatorstatement.

Note: Its always good to go for a interiors loan (max up to 3 lakhs) along with the home loan, which might save you the hidden chargeswhen combined. For the interiors loan you need to get a quote from an interior designer and get it valuator sanctioned.

Collect : Application form Valuator Statement

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6. Waiting period: Now its time for the waiting period. The waiting period may vary from person to person. Normally in the special home loan branch, it can be as fast as 3 days. Periodically call them to ensure that the process is going forward. Also make sure they inspect the property, because unless and until they inspect, you can’t reach the disbursal stage.

7. Documentation: Once the loan is sanctioned, you get a call from the bank for documentation. Carry all the original documents which you have submitted while applying for the loan.

Loan applicant along with guarantor needs to be present at the bank for the documentation. Builder is normally not required, if its a land lord share, then it is a must for him too to attend.

8. Disbursement: Once we get the Loan Sanction letter go to the builder and get the following documents 1. NOC from the builder stating he hasn’t mortgaged this property to any other bank 2. Tripartite agreement [This is required only if its a ongoing construction.3. Demand Note from the builder[how much money he needs for the particular construction stage]. Note: Please make sure whatever demand note they make is matching with the schedule of payment.

Collect : DD in favor of builders

9. If it is an under-construction property, for partial disbursements and for further payments you can just send a mail to the manager to please disburse the amount XXX and then ask the builder to send a boy to the SBI branch with the original demand note and they can collect the DD from the bank directly. You need not go to bank anymore.

10. Registration : Now its time for registration and the final payment to be made to the builder. You need a DD for Registartion Stamp duty in the name of Sub-registrar and a DD for Mortgage Stamp duty in the name of Sub-registrar

Conclusion. Send an SBI Postal mail form after registration saying you had submitted all the registered documents to SBI.

How Can Loanyantra Help You.

The above process needs a lot of care and patience. More than anything, it needs your valuable time, planning and energy. Once you register with loanyantra, you can relax and fulfill your loan disbursal process. Our relationship manager guides you in each and every step, also assisted home service for all your documents that need to be submitted in the bank. Also, loanyantra’s relationship manager is accessible to you to answer your questionnaire , anytime. All you need to do is just login, as it doesn’t cost you but it only helps you.