The Impact of GST on Real Estate
Buying a dream home is a momentous goal in everyone’s life. If you’re looking forward to take that leap in your life then these are some crucial things you should be keeping in mind to ensure your home loan doesn’t get rejectedBuying a dream home is a momentous goal in everyone’s life. If you’re looking forward to take that leap in your life then these are some crucial things you should be keeping in mind to ensure your home loan doesn’t get rejected
1. The RERA Effect: Under the new RERA regulations, Banks (in consultation with Reserve Bank of India) have decided not to offer loans to the WIP and new building projects that are not registered under RERA. The decision is expected to weed out all the unreliable builders from the real estate market. If you have obtained a Home Loan to buy a new house or if you are repaying Home Loan for an existing home purchase, don’t forget to check with your builder if it’s RERA approved or not. If it isn’t, get it bought under observation of RERA Authorities as soon as possible for smooth Home Loan repayment and getting hassle-free ownership of your home. Also, if you are looking to seek home loan for a new project ensure to look for projects which are registered under RERA to avoid rejection of loan
2. Availability of applicant during telephonic verification: If you fill in your landline number in the home loan application form, the bank authorities will call you on the same for verification purposes. In case, the bank calls you when you are away at work or busy elsewhere, the bank simply considers it to be a case of ‘no response’. Therefore, it is very important you also provide your mobile number in the application form.
3. Age Criteria: If you are nearing retirement (60+), the banks will hesitate to approve the loan as in few years there is a possibility of the repayment capacity to be comparatively lesser. In such cases, few banks will offer some short term loans but it will end up with huge EMIs which will burdensome to the applicant.
4. Job stability: If you are a frequent job hopper, then this will negatively affect the chance of you getting a home loan as banks evaluate clients pay back capability by taking job stability into consideration. In a few cases, certain banks insist that an applicant must be employed with a particular organization for atleast a year to be eligible for a home loan.
5. Existing Loan Repayment: Whenever you apply for a loan, the bank will first check your CIBIL score. If you have many unsettled loans like car loans, commercial loan or personal loan then the banks will consider your disposable income after deducting the ongoing EMIs. The bank will disapprove the loan application if other loan repayments cause stress on your income by considering the repaying ability.
6. Poor credit score: Credit scores are a numerical expression based on a level analysis of a person's credit files. Accumulating credit card dues, Bills, EMI payments, previous pending debts like insurance premiums, phone bills over the years can also could be the strong reason for loan application rejection. To brighten the prospects to accomplish a home loan, make sure that you pay off your outstanding loans, bills and credit card dues on time.
7. Income Tax Return Filing: It is important to file your income tax every financial year, whether or not you receive your Form – 16 from your employer. Lenders and banks check for a clear track record of filing income tax returns of the last two years, before approving a home loan
8. Being Loan guarantor for defaulter: Whenever you are signing on the dotted line to be someone’s loan guarantor, you should be extremely cautious. You must ensure that the applicant has an ability to repay the money without any default. If the applicant fails to repay the loan amount then, the guarantor (i.e. you) will be liable to repay the loan behalf of the applicant, which in turn will result in your poor credit report.
9. No NOC on a Previous Loan: It is imperative that you get a NOC (No Objection Certificate) on any previously closed loan. The list is vast and it is not easy to get your home loan sanctioned. Hence, if you do not provide with a NOC of your old loan that has been closed, banks or lenders reject your home loan application. Therefore, you must be very sure that your records are clear. Sometimes providing additional security towards your home loan application such as fixed deposits, collateral securities, a guarantor or insurance policies can help you secure the home loan you are looking for.
10. Application has been turned down earlier: While evaluating home loan applications the banks will look over the list of rejected home loan applications. In such cases, the applicant should not apply for a home loan in several banks at the same time. If your application is rejected, you would have to rectify the issues and then wait for a new offer from the bank before you approach another bank.
We hope with these pointers, we have made it easier for you to work on a better and detailed background work for your home loan application which may make it easier for approval. If you have come across any other problem do comment below so the other readers can gain some knowledge out of it.