Common problems faced by home loan buyers

This article highlights some of the common problems faced by the home owners that should be resolved by the buyer only. The home loan buyers face some of these common problems and are rejected by the lender due to these reasons.

The home loan buyers should prove their creditworthiness and their ability to repay their loan after a certain period along with the specified rate of interest. Many applicants are rejected due to various reasons. A person should learn to secure right home loan product from a right lender. Many of them borrow loans from franchisees and later on realize that their firm is unregistered. Some of them accept the application, even if the borrower does not fulfill the eligiblity criteria and when the application is rejected, they do not even pay the processing fees. So, the first step is to ensure that the processing fees are refundable.

Problems encountered by home loan lenders

Poor credit score

A person's credit score is poor if he or she has borrowed loan earlier from one or more sources and yet has not repaid the loan. When the credit score is lower, a person should preferably not apply for the home loan because once the application is rejected, then the person cannot easily secure loan even if he or she has improved the credit score. The lender yet suspects the creditworthiness of the borrower.

Rate of interest whether fixed or floating

Sometimes, the borrower plans to pay interest at a floating rate, but the lender may realize that the borrower may not pay regularly based upon floating rate due to his or her credit score and may reject the application. So, the borrower should be careful before fixing the tye of interest rate. Sometimes, the lender may be willing to allow the borrower to pay at fixed rate, but later on even without informing the borrower may state that the borrower should pay at a floating rate of interest that is not adjustable to the buyer. So, the buyer should be careful and should communicate to the lender in this regard.

Processing fee

Some lenders charge the processing fees even before checking the application. Sometimes, the lower management people of a bank may charge processing fees at 1%, but later on the application may be rejected and the amount is non-refundable. Sometimes, if the person can applied for larger loan amount, then he or she should judge if the loan amount can get approved.

Desired loan not sanctioned

Based upon qualification criteria, the desired amount may not be sanctioned by the lender. So, the applicant can produce all the possible documents to prove his or her credit worthiness. A person can stil improve the credit score and again apply for the loan to secure more amount.

First stage rejection

If the borrower is not able to pay the down payment, then the loan application may be rejected, irrespective of the credit score and financial worthiness of the buyer. So, the buyer should always ensure to have enough amount while securing loan to immediately pay to the lender.

Problem with the property

The application may be rejected due to the property issues. The property that the buyer wants to buy is not free from litigation. The title of the property cannot be exactly determined. The building is located in an area where crimes frequently take place. So make sure that the property that you wish to purchase is free from legal disputes and meet the owner of the house to ensure the title of the property.

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