A rejected home loan application after you have paid a token is an expensive, stressful position. Most rejections trace to a handful of causes, and most are fixable with notice.
Reasons relating to you
Credit score below the lender's threshold. Different lenders set different floors. A score in the 700s is generally comfortable; below 650 is difficult with most mainstream lenders.
Existing obligations. Lenders assess the proportion of income already committed to EMIs. Car loans, personal loans, credit card balances and any loan where you are a guarantor all count.
Unstable employment history. Frequent job changes, or a recent move within a probation period, raise questions.
Insufficient or undocumented income. Particularly for self-employed applicants where declared income and actual income diverge. Lenders work from ITRs.
Age and tenure. A loan cannot generally run past retirement age, which compresses the tenure and therefore the eligibility for older applicants.
Reasons relating to the property
The project is not on the lender's approved list. Banks maintain approved project lists. A project absent from a particular bank's list may still be fine, but that lender will not fund it.
Title issues found in legal appraisal. The bank's lawyer reviews the chain of title independently. Their finding is a useful second opinion, free to you.
Valuation below the agreed price. If the bank values the property lower than your purchase price, they fund a percentage of their valuation, not yours — leaving a gap you must bridge.
Approval gaps. Missing occupancy certificate, unapproved deviations, or land use questions.
What to do in advance
Get a pre-approval before you shortlist. It tells you your real budget and surfaces problems while you still have options.
Pull your credit report and fix errors — they are more common than people expect and take weeks to correct.
Close small loans and clear credit card balances several months ahead.
Do not change jobs mid-application.
If you are rejected
Ask for the reason in writing. Lenders differ substantially in their criteria, and a rejection from one is not a rejection from all. A housing finance company may take a view a bank will not.
If the reason relates to the property rather than you, take that seriously — the bank's lawyers looked at documents you may not have.
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