Owing a home is one of the top aspirations of many individuals. Investment in real estate is for life and comes at a cost. Thus, making it difficult to own them simply based on personal savings or funds. The availability of home loans in such circumstances is of big help. But when it comes to the approval of a home loan, there is a very famous saying: “There is a slip between the cup and the lip”.
At times, even after the sanction of the home loan application from a bank or other lending institution, it gets rejected or cancelled. The rejection may come for various reasons, and it is important to be aware of all such reasons so that you get 100% confirmation or approval for the home loan.
Problem in Approval of the Property
Before giving final approval of the home loan amount, lending institutions verify the property and look after the papers and other related documents. They inspect and cross-check all the details on papers with the construction site.
It could be using materials, municipal construction rules, legal obligations, etc. If the invigilators found any detail not matching the papers, the home loan might get cancelled or rejected.
The Lender Does Not Fund Your Project
In most cases, the developer has the lender’s approval, but the approval might not be valid for the borrower’s chosen project. One possible reason behind the cancellation of the amount is that while the bank or the lending institution recognises the developer, the project is not approved and thus funded by your lending institute at that time. In such cases, it may take a month or two to get the approval. It is always suggested to book a home where the lending institution funds the project and the developer.
Lender Finds there is Another Application for Home Loan in Between
Creditworthiness is one of the imperative conditions in the disbursement of a loan. In most cases, lenders double-check the credit report even before the day of disbursing the amount to be 100% sure. In case you have applied and availed of another loan or have defaulted loan of the previous lending, the lending institution will nullify the eligibility of the loan.
If you see that you have the eligibility but are not getting the loan, you already have an existing loan. Make sure to close the existing loan to get eligible for the new loan. You may seek help from a professional and experienced home loan agent to boost your creditworthiness so that you get quick approval for the home loan.
Age of the Property
In case of a home loan, the property is collateralised by the bank. In case the property is very old, the lender will conduct an investigation to evaluate the probability of structural collapse. The lenders also look for technical and legal investigations. If the property does not adhere to the government or regulatory body’s norms, the home loan application might get rejected even after the sanction.
Investing in real estate is the investment for life. Thus, it is important to research the property properly to get one-shot approval for the loan. Also, consult with the promoter to know the property’s real worth and whether it makes investing in the project. Also, take care of the creditworthiness of your profile, and you should be responsible for the credit every time.