Why Was My Home Loan Rejected?

If you have been in the unhappy position of having your home loan rejected, try to get a reason for it, as then you may be able to do something about it. Each financial institution has different criteria in how they approve applicants for their home loan products. What one bank prefers their customers to have, another may not attach much importance to. Some of the reasons for a home loan rejection could be: -

- Lack of income. Any financial institution wants to know that the loan applicant can pay back their loan. If the monthly repayments are over a certain percentage of your income, the loan could be refused.
- Other debts are also taken into consideration. You might be also paying off a car or have significant credit card or other debt.
- Credit history. If you've failed to make payments on other debt - even several years ago, it could make the lender doubt your ability to pay regularly now. Find out if there was a time you didn't make a timely payment on debt. If you can prove that was due to illness or job loss and that your circumstances have now changed for the better, then it could make a difference.
- If you have current overdue accounts.
- If you have a history of changing jobs frequently it may give an appearance of instability.
- Likewise if you move around a lot.

By: Melanie

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When applying for fixed rate loan, don't get too caught up in the excitement of buying a house - make sure that you read the terms and conditions of your online loan carefully.