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6 Red Alerts in Credit Profile Lead Rejection of Home Loan

Getting a home loan to buy a house is one of the biggest financial commitments you can make in your working life. Given that home loans involve a big ticket amount of even 1 Crore Home Loan, not being able to meet any of the criteria can get your application turned down or get you a loan with a higher interest rate.

To make sure your application for a 50 Lakh Home Loan doesn’t get turned down, it’s a good idea to know and remember these common things that lenders look at when deciding if someone is eligible:

No credit score or a low one

Over the past few years, a person’s credit score has not only become one of the most important ways to judge their creditworthiness but it is also used to figure out the interest rate on a 50 Lakh Home Loan. Before sending in an application, you could ask Indiabulls about the importance of your credit score and whether or not your current credit score makes you eligible for a home loan. Having a good credit score is helpful in many ways, especially because it shows the history and pattern of responsible credit repayment. This not only increases the chances of getting a home loan but also lets the borrower get a lower interest rate on the 1 Crore Home Loan.

On the other hand, having a low credit score shows that you haven’t been responsible for paying your loan EMIs and credit card bills. This can make your lender hesitant to lend you money, which could mean that your home loan application is denied or that you have to pay a higher interest rate.

High ratio of EMI payments to income

Lenders also look at your EMI to income ratio when deciding if you’re eligible for a loan and if you’ll be able to pay it back. This is the percentage of your income that you currently spend on 50 Lakh Home Loan EMI payments. If your ratio is higher than 40–50 percent, lenders may be hesitant to give you a loan. This is because a higher EMI to income ratio shows that a big chunk of your income is going toward debt payments, which means you are more likely to stop paying in the future.

So, if you don’t want your application for a home loan to be turned down, make sure that the ratio of your EMIs to your income doesn’t go over 40%–50%. This includes the EMIs for the proposed loan. If you aren’t sure what your EMI to income ratio is or if it meets the lender’s eligibility requirements, you can call the lender or look at their website to know if you can apply for a 50 Lakh Home Loan. Also, if you have a high EMI to income ratio, you are more likely to not pay back your loan in the future. This means that you may have to pay a higher interest rate on your home loan to make up for the higher risk of lending to you.

The borrower’s age doesn’t meet the eligibility requirements.

When figuring out if you can get a home loan, talking to the lender will let you know that your current age and the age you will be at the end of the loan term are also important factors. Lenders usually want the 50 Lakh Home Loan to be paid off before the borrower retires since the borrower won’t be getting regular income after retirement, and if they do get a pension, it will be for a much smaller amount.

Since younger borrowers have more years of working life left to pay off a home loan, they are more likely to be approved for a long-term loan of up to 30 years than someone in their 40s or 50s. People who are getting close to retirement can improve their chances of getting a home loan by doing things like adding a co-applicant or trying to make a bigger down payment to lower the LTV ratio.

To improve your chances of getting a 1 Crore Home Loan, it would be better to think about getting a co-applicant, like a child or a spouse who makes money. This can also help you get a low and attractive home loan interest rate because it makes you more eligible, which is good for your credit profile and your chances of getting a home loan overall.

Property related issues 

Since a home loan is backed by the property you want to use it for, the lender does their due diligence when evaluating the property you pledge. Before approving your application for a home loan and giving you a loan based on the property’s value and LTV ratio, lenders look at things like the property’s location and age. Make sure to ask the lender questions before you finish the application and send it in. You can find out if your property can be used as collateral for a home loan by getting in touch with the lender. Keep in mind that a lender may turn down your 1 Crore Home Loan application if the property’s remaining age is on the low side or if the property isn’t in the area that the lender says it must be in.

Not able to meet the lender’s minimum income requirement

When looking at 50 Lakh Home Loan applications, almost all lenders have a minimum income requirement for people who want to borrow money. When someone wants a home loan, income is often the first thing that lenders look at. Such income requirements can even change based on where the applicant lives (rural, urban, etc.) because each city has a different pay scale and cost of living. For someone who lives in a city, the minimum income requirement might be higher than for someone who lives in the country or a semi-urban area. Those who don’t meet this income requirement usually have their applications denied outright, or they might get approved for a smaller amount and be charged a higher 1 Crore Home Loan interest rate if they meet all the other requirements but have a risky credit profile.

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