Tips to ensure home loan approval

Buying a home isn’t always about just selecting the right property. it is likely to be the biggest financial transaction of one’s life. Arranging funds together to buy yourself a dream home is actually a dream for everyone. The biggest hurdle for anyone is to arrange funds and there comes the requirement for taking a home loan. Moreover, the most tedious is to get approval on the home loan.

Taking a home loan is one of the most crucial steps. Even though buying a home is a dream for many but not all can have that amount of liquid cash.  Out of 100, about 90% of people prefer taking a loan. Taking a home loan is a whole long process and it involves a lot of documentation. and it has to be correct in order to avail loan benefits. However, sometimes your loan might get rejected due to several reasons.

Let’s find our few reasons for which your home loan can be rejected:

Poor credit score:

While borrowing money one of the most important thing to be kept in mind is that you’ll have to pay it back with due interest. Your credit score has to be good so that the bank is able to trust you and grant a loan. A credit score is something that represents your track record and credit worthiness. A good credit score represents that you are a genuine loan borrower and a payer too. Most millennials are not able to pay the full amount of credit card loan. They generally pay the minimum amount due which is the main result of a poor credit score. Hence, the banks ensure that any applicant must have a credit score of 750 or above when applying for a loan.

Age of applicant:

Loan repayment is not a duty for the payee but also the bank. If the applicant is close to retirement the banks are hesitant to offer loans because the chances of repayment is less in case of those applicants. Due uncertainty of cash flow after retirement banks do not prefer to give loan to people close to retirement or old age people. However, they can offer a short-term loan, in that case, the EMIs will be high. Therefore, the age of an applicant has a very important role in home loan rejection.

Job stability:

This is one of the important reason for home loan rejection. Generally, lenders pay interest in ensuring that their loans serve properly. This factor is dependent on the continuous flow of income and it can only happen if you have a stable job. Banks always prefer giving loans to those on whom they have the trust of paying it on time. A salaried income person is able to repay his loans faster than those who have an unstable job. To be eligible for a home loan, banks prefer applicants who are employed in a particular company for three consecutive years. Even if the applicant has a reputation, the banks may reserve the right to reject the loan.

A regular flow of income and filing of income tax returns:

If you are engaging yourself  in such a profession where the regular flow of your income is volatile and unpredictable, the lender may not consider your home loan favorably. For example incomes from sources such as tuition, catering, cooking, etc. for which the lender may not be confident about the genuineness of the income. Hence, he/she may not be comfortable to getting loan approval. Similarly, filing income tax regularly also stands as a good reason for the rejection of the home loan.

Failure of NOC certificate from any other loan:

Essentially, the applicant should have a NOC certificate from other loans that have are already under settlement. If this certificate is not present banks hesitate to offer loans. It is because of the chances of being a defaulter.


It is important to furnish all the relevant proofs and documents while submitting any document regarding the home loan application. It is an important criterion to check each and every document is correct. Even a minute mismatch in any of the document can damage your approval rate. Similarly, all your signature on the application form should match the signature proofs that you submit.

Pacifica Companies strives to ease your home buying process and provide you home loan via different banks. This way you can buy a home in a hassle-free process and enjoy living a beautiful lifestyle with your family.