A large number of home loan applicants get the shock of their lives when they discover that their application has been rejected. There are many reasons for which your home loan can be rejected by a lender or a bank. The best way to prepare for such a situation is to prepare in advance so that all holes are covered when it comes to your loan application.

Never keep unpaid dues

Home loan applications are often cancelled when credit history check reveals unpaid dues. To clear this condition, always be punctual with payments. Never miss a deadline on EMIs and credit card dues.  In this small way, you can ensure your home loan application is one-step closer to approval.

Avoid heavy debt

Home loans are given when the lender is comfortable with your capacity and intention to repay. If you have more debt, your existing repayments may make it look difficult to repay new home loan EMI. Hence, don’t take too much debt even if they are offered at lip-smacking rates.

Stick to jobs longer

Job stability is a big factor for long-term loans. Changing too many jobs reflects poorly on the home loan application. So, stick to jobs longer and apply for a home loan once you are 2-3 years with. current employer. Also, the reputation of your employer is important. So, avoid seeking employment in a company that has a questionable track record.

Avoid being a loan guarantor to others

Being a loan guarantor to someone can sometimes be risky. If the person doesn’t pay the loan back, the onus to repay is on you as a guarantor. You may have gone to a different city to live, not knowing the original borrower has defaulted. This is recorded on your credit history and can lead to home loan application getting rejected. The safest way is to avoid becoming a guarantor altogether. 

File regular Income Tax Returns

Banks and financial institutions are uncomfortable about lending to individuals who font file income tax returns or ITRs. Build a clear track record of filing income tax returns of the last two years, before applying for a home loan. The ITR also serve as a document for demonstrating your income credentials. So, pay taxes and file returns on time.

Pick up verification calls

Many home loan applicants give wrong telephone numbers or don’t pick up calls from lenders when they come during the application process. In case, the financial institution calls you repeatedly and every time you are away at work or busy elsewhere, they simply consider it as ‘no response’. So, be sure to give correct numbers and pick up calls.

Get NOC on all previous loans It is highly important that you get a NOC or No Objection Certificate on any or all previously closed loans. Rejections on your home loan application may occur if one does not provide a NOC. It’s better to get NOCs from every loan provider once you have closed the loan. Keep these documents safely.