If you've been opting for a home loan, you may have encountered some issues like home loan rejection, other types of home loan refinancing that don't fit into your plan. The process of home loan rejection is frustrating, especially when you have spent a lot of time and effort applying and researching for the right home loan. And, it can even be stressful if you've already found the perfect loan, but it gets rejected at the last minute. However, these things shouldn't keep you from exploring other options and considering refinancing your home loan.
Bad Credit & Low Down Payment Can Cause Issues
Some amongst the most common reasons for a home loan rejection include having a bad credit score, not having an adequate down payment, or having too high a monthly income. It's very common for low-interest home loans to have only maximum LVRs of around 70%, thus requiring a good 20-30% down payment to qualify. This is where things can get tricky. Some lenders have very specific requirements for their home loan applications, and these requirements change from time-to-time. You may have the best plan in the world, but it could get disqualified because your down payment is too low. So the next time you get a home loan rejection, don't get discouraged and try another approach to refinancing your home loan.
We Help You Through Our Nonconventional Services
There are many alternatives to getting a home loan rejection, including a bank overdraft, a nontraditional lender such as an Internet lender, or an online loan EMI calculator. Several banks and financial institutions are starting to use an alternative type of lending to make up for shortfalls on traditional loans. We turn out to be such a nontraditional and reliable source for you allowing borrowers to apply through them for home loans without necessarily having to use a traditional bank. This makes for a fast and convenient process.
Factors That Impact Your Home Loan to Get Rejected
Low Credit Score
One of the main reasons for home loan rejection is a low credit score. A low credit score is a hindrance for many lenders to provide loans to loan applicants. If you've a low credit score, it is better to improve your credit score by going for credit counseling from us and paying off your unpaid bills.
Unfavorable Financial Condition
Another of the reasons for home loan rejection reasons is financial hardship. The financial condition of the borrower plays a vital role in deciding the approval of the loan. If your financial condition has declined drastically in the recent past, then your chances of approval are very low. Before opting for a loan from any lender, be sure to prepare a convincing financial statement that presents your current financial status. Moreover, before applying for home loan, ensure that your credit history is above average.
Bankruptcy & Other Records
The final and one of the most common reasons for a home loan rejection is default on loan repayment which you have taken in past. No lender likes to deal with borrowers who are on the verge of loan default. Some of the reasons for home loan rejection may include excessive use of credit cards, too much debt, and failure to pay the loan on time. These factors affect your credit report and, thus, your future ability to get home loans. There are various other reasons for home loan rejection, which can be checked with the loan officers during the application process. However, it would be best to keep in mind that these reasons for rejection will vary from lender to lender. For example, some lenders may reject your loan application because you have too many unsecured debts, while others may reject it because you have too many credit card debts. The same applies to mortgage companies. Hence, it is imperative to check with your banker and know the reasons for home loan rejection. It would assist if you remembered that a loan rejection is always an attempt to verify whether you're a reliable borrower or not.