7 Unexpected Reasons Your Home Loan Application Could Be Rejected

Let’s face it; buying a home can be a laborious job unless you are filthy rich. You will have to save up for the down payment and furnishing, compare different properties, and then secure a loan.

When we talk about home loans – getting a home loan disbursed is far deceptive than actually settling for a house. From your eligibility and home loan emi’s to the property you are looking to purchase has to be in order.

Seeing the bigger picture, though you might have a good feeling but your lender may reject your home loan application because of some tiny details. Let us have a look at the reasons owing to which your home loan application can be rejected


Builder not authorized –

You have finally found your dream home having all those facilities you have dreamt about. You have also done all the documentation for your home loan and haven even calculated your home loan emi with the help of an online emi calculator.

Next step is to apply and you have those positive vibes going that you will get a confirmation. But unfortunately, all dreams come crumbling down when you hear the news of the rejection. Now, you will be wondering as for where you went wrong.

Also Read: 14 Things You Need To Know Before Applying For A Personal Loan In India

Did you check whether the bank also knows the builder?

Yes, your builder’s name and reputation are also checked by your bank before approving your home loan application. This does not mean that your builder is hiding something or he is a crook.

It could just be that your builder may have aligned with few other banks. Therefore, before you apply for a home loan, make sure you have asked your builder about the details of the partner banks.

This move will help you to save seeing any rejection in your credit report and hassle of applying for the loan once again.

Famous builders are always preferred by the banks as compared to the new ones. But the new entrants can offer you better deals in order to have the market share.

It is advisable you have done some research work on the builders and the banks they have an alliance with.

Also Read: 6 Common Misconceptions You Might Have About Car Loans

Property Hardships –

Make sure you have not confused the builders with their projects. Banks usually treat the builders separately from the projects they have undertaken.

If a builder in engaged in the development of multiple properties, then the bank will scrutinise each project in order to finalise the eligibility.

For the same builder, lenders can offer approval for only one property while discarding another. This means the bank may approve your builder, but make sure you have checked whether the property is approved.

There are chances that the land must be facing some regulatory clearance issues. If you eyeing a multi-phase property, make sure the phase in which you have plans to purchase the apartment, is duly approved by the bank.


Significance of an employer –

A negative list of companies has been maintained by the banks and the lenders. Now, as per this list, if you are working in a company that is included in that list, the chances of rejection are quite high.

The list will have some of the best and popular companies as well. Therefore, it is not mandatory that you are always responsible for the rejection; your employer can also be the reason for your home loan rejection.

In order to avoid such situation, make sure you have inquired with your loan provider whether the name of your employer is present in the negative list or not.

Also Read:  8 Personal Loan Mistakes You Need To Avoid In 2017

Mentioning correct details –

It is important that the information mentioned in the application form and the home loan application should be same. If it differs, then it will result in rejection of your application.

If you have any change in your personal details, it is your job to inform your lender and the bank about that.

You can easily check your own credit report from the agencies by paying a small amount. Following are the documents required while you are applying for home loan –

  • Salary slips of past 3 months.
  • Processing fee cheque in favour of the bank.
  • Identity Proof
  • Investment Proof.
  • Residence Proof.

Age Factor –

While disbursing a loan, your age is of great significance for your lender. If your age is between 21-65 years then you can apply for the home loan.

All you need is to be a little cautious and aware of the rules and regulations while applying for a home loan.

Rejection by other banks

At times, people in hastiness and curiosity tend to apply in multiple banks. Be informed, if your application gets rejected by other banks then it will have a negative impact on your credit score.

It is important you have waited for the bank to reply in order to know the reason as for why your home loan application got rejected and what you have to do in order to correct those errors.

You can choose to analyse your credit score, it will surely come handy in taking the right step.

Signature Mismatch

Applying for a home loan is no child’s play. A home loan application is quite lengthy and requires your signature at various places. It is imperative that your signature stays the same everywhere and the signatures should be identical in all the attached documents as well.

Therefore, you have to ensure that your signatures remain identical everywhere or else you have to fill up the form and go through the whole process again.


Yes, there are unexpected reasons owing to which your home loan application can get rejected. You cannot be sure of having a home loan on the basis of your income and good credit score.

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