Reasons for not realising housing loans
Posted on: 11/Dec/2018 4:06:09 PM
Housing loan is the most predominant requirement of all people who want to realise their dream ambition of having their own house. In today’s price environment, it requires a few lakhs to buy a house! Thus, as far as the people belonging to the middle-class economic category is concerned, it is well-nigh impossible to buy a house without a housing loan.
As far as the lending agencies such as banks and other financial concerns, they deem housing loan as a long-term loan. So, the housing loan granted will be entirely based on the repaying capacity of the housing loan applicant.
Some errors committed by the housing loan applicants could be the reasons for being denied a housing loan. Once these errors are resolved, the difficulties encountered while processing the house loan may be solved.
Other Debts
No doubt, buying a house is a huge investment. However, it is a large responsibility as well! In case there is an already existing loan on other fronts, the prospects of getting a housing loan to reduce considerably. The higher the amount of loan, the higher will be the EMIs (Equated Monthly Instalments) to be paid to various debts. So, the lender may feel wary of extending a housing loan. Moreover, lots of debts will indeed very adversely affect your financial condition.
Thus, in case of setting out for procuring a housing loan, it is advisable to settle and close all other existing debts.
Very high debt amount
A house is a long-term asset which will last more than a lifetime. So, several factors/features are to be considered before deciding to buy a house. However, we are very likely to forget including the cost of these additional factors/features considered for the house!
However, it is highly advisable not to take a very higher amount of housing loan the repayment of which may be much beyond one’s capacity/ Even if going for the higher amount of higher housing loan, it is recommended to have 2 applicants involved. This would facilitate the approval for a high amount of housing loan. The banks approve housing loans based on the monthly earnings of the applicant and thus, they will compare the EMI for the proposed loan with the applicant’ monthly earnings. In case the EMI is much higher, there are prospects of the application for housing loan being rejected.
Low Credit Score
A good credit score is essential to get housing loan sanctioned. So, it is always better to check and get your credit score at least once in 3 or 6 months. In case the credit score is rather low, it is advisable to settle the pending amounts. It is better advised to settle this before applying for the housing loan.
Untrustworthy builders
The detail of the builder from who the house is bought is another important factor in the process of housing loan approval. This is because the lenders consider the trustworthiness of the builders as a safety feature. In case the loan availed fails to pay the EMIs, there are prospects of the lender to sell this house and recover the pending.
In case the builder selected proves to be untrustworthy, the bank will not entertain the application for the housing loan. So, it is better to coconfirm before deciding the purchase of the house whether the builder has approval from RERA. This would prevent the possibility of the loan getting cancelled at the last moment.
Permission for construction
The applicants who want to buy the plot first and build later must ensure getting permission to construct a house on the plot to be bough/ In case the location is Chennai, approval must be obtained from CMDA. For other parts of Tamil Nadu, approval must be received. Banks do not come forward to extend housing loan for the plots permitted by Panchayats. So, it is advisable to have the proper approval from the relevant authorities before commencing construction.
