Why Banks Often Refuse A Home Loan – Guest Post
Many people know there are thousand of reasons why a bank may refuse a loan, making them desperately seeking for alternative ways of borrowing money. It becomes crucial in the case of a home loan, where a person has to be well-prepared in many aspects in order to get one. It is necessary to have a good credit score, ensure that you don’t have credit card debts, increase your revenue index and close out your previous online loans. Unfortunately, having done all of the above doesn’t guarantee you will qualify for the home loan.
You have to be aware of these pitfalls if you want to obtain your loan with no hassle and finally avoid spoiled nerves.
Frequent Job Shifts
It is typical for our generation to change jobs every few months. However, this often signals instability to banks, being an excellent reason to refuse your loan request. Banks tend to pay great attention to job stability criteria, and some of them even insist that a candidate was employed for one or several years to qualify for a home loan.
Thus, frequent job shifts may negatively affect your credit history. If you plan to apply for savings account payday loan, it is highly recommended that you stay with a company for a minimum of one year. However, such time period is only good during the first years of your professional activity. In fact, having a longer stint at the enterprises you work for contributes to your job stability index.
Your Physical Address Has Been Blacklisted
If you share your place of residence with someone who failed to pay off his loan or credit card debt and therefore has appeared in the national credit bureaus’ blacklists, then your loan application will most likely be rejected by banks. That’s because your physical address will find a match with the one figuring in the defaulters list.
In this case, inform your financial manager about the issue, and mention that you don’t have a personal relationship with the person you share your house with. In case if this person is a member of your family, underline the fact that he or she is not financially dependent on you.
Bank’s Internal Regulations
You should also keep in mind that each financial institution is subordinate to it own regulations. There may be some problem profiles or locations marked as inappropriate for lending in their internal guidelines. And if you somehow meet these criteria, the bank will refuse financing of your loan.
Thus, if your credit profile seems inappropriate for the bank, you may always provide additional security indicators, be it a cautioner, fixed deposits or insurance policies. Running your own business may also serve as a strong proof of your repayment ability.
My name is Sandra. I work as a financial consultant at an American company dealing with no credit check loans. Our team is working hard to help people regain their financial stability.