Home Loan Rule: If you make this mistake then no bank will give you home loan, know the rules..

Home Loan Tips: Property prices have increased so much everywhere that now buying a house has become the biggest challenge for the common man. Home loan acts as a big support for buying a house, but due to the large amount of home loans and high interest rates, paying its EMI (home loan EMI rules) also becomes a burden for the customer. The amount of home loan is also large and it is a long-term loan, due to which banks also give loans only after thorough investigation.

Loan-giving banks and housing finance companies investigate the applicant on many criteria. These include dependence on debt and payment history as well as the applicant's qualification, experience, number of dependents in the family, etc. If any of these criteria is not met, the application may be cancelled. Let us know what these criteria are…

1) Credit Use: Lenders give loans only up to 80% of the market value (LTV) of the property (up to 90% in case of home loans worth less than Rs 30 lakh). You will have to arrange for the rest of the money i.e. down payment yourself. If you have more loan accounts running in your name, then in such a situation your application for a home loan will be less likely to be approved.

2)Low credit score: Any lender checks your credit score before giving you a home loan. A credit score of 750 or more is considered good by lenders as they can trust you for future payments. Your credit score can be affected due to delays or defaults in loan or credit card EMIs. However, if your home loan application is rejected due to a low credit score, you will either not get a home loan or get one at a higher interest rate.

3)Loan repayment capacity: When you apply for a home loan, the bank representative checks your income to understand whether you will be able to pay the loan amount you have asked for. If you have applied for a loan that is much higher than your repayment capacity, then your home loan application may be rejected.

4) Age of the applicant: The age of the applicant is also taken into consideration while disbursing a loan. If the borrower is either a fresher or is close to retirement age at the time of applying for a loan. In both cases, the lender feels hesitant to approve the home loan application as he is unable to check the repayment capacity of the borrower.

5) Unstable employment: People who change their jobs frequently within 6 months to 8 months are not considered reliable by most lenders. In such a case, the chances of the loan application getting cancelled are high.

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