Applying for a home loan is a very tedious procedure. It takes a lot of your time and effort to get all the legal documents ready. However, not all home-loan applications go through and your application gets rejected. Here are a few reasons as to why your home loan application has been rejected.
๐ญ) ๐๐ป๐ฐ๐ผ๐บ๐ฒ ๐ฐ๐ฟ๐ถ๐๐ฒ๐ฟ๐ถ๐ฎ ๐ฎ๐ฟ๐ฒ ๐ป๐ผ๐ ๐บ๐ฒ๐
A common reason for your bank to reject your home loan is often because your income does not tally with your loan amount. Simply put, it means that the bank thinks you cannot afford the loan. For example, your monthly income could be RM3500 but your loan repayment per month is RM3000, so would it make sense for the bank to approve the loan for you?
๐ฎ) ๐ง๐ต๐ฒ ๐ฑ๐ฒ๐๐ฒ๐น๐ผ๐ฝ๐ฒ๐ฟ ๐ผ๐ฟ ๐๐ฒ๐น๐น๐ฒ๐ฟ ๐ต๐ฎ๐ ๐ฏ๐ฒ๐ฒ๐ป ๐ฑ๐ฒ๐ฐ๐น๐ฎ๐ฟ๐ฒ๐ฑ ๐ฏ๐ฎ๐ป๐ธ๐ฟ๐๐ฝ๐
Banks check all ongoing legal proceedings or for bankruptcy using a system called Credit Tip-Off System (CTOS). If your developer or seller has declared for bankruptcy, the transaction will not be approved by the bank. So itโs always cautious to check by yourself before applying for the home loan.
๐ฏ) ๐ง๐ต๐ฒ ๐ฑ๐ฒ๐๐ฒ๐น๐ผ๐ฝ๐ฒ๐ฟ ๐ต๐ฎ๐ ๐ฏ๐ฒ๐ฒ๐ป ๐ฏ๐น๐ฎ๐ฐ๐ธ๐น๐ถ๐๐๐ฒ๐ฑ ๐ฏ๐ ๐๐ต๐ฒ ๐ฏ๐ฎ๐ป๐ธ
Each bank has its own record of developers that they have blacklisted. Most of the time the list varies from bank to bank. Each bank usually has their own reasons as to why a specific developer has been blacklisted. Much like the above-mentioned reason like bankruptcy, other reasons may include being sued in court or have a bad track record with that bank.
๐ฐ) ๐ก๐ผ๐ ๐๐๐ฏ๐บ๐ถ๐๐๐ถ๐ป๐ด ๐๐ต๐ฒ ๐ฟ๐ถ๐ด๐ต๐ ๐ฑ๐ผ๐ฐ๐๐บ๐ฒ๐ป๐๐
Submitting the right documents should be given the topmost priority when you apply for a home loan. It is absolutely essential to have all the right documents including everything related to income.
Some important documents that you should submit to the bank in order to ensure that the home loan application process goes smoothly include, salary credit bank statements and the booking form by the property developer. Do make a note to double-check simple things on your application forms like your address and contact number.
๐ฑ) ๐ฌ๐ผ๐๐ฟ ๐ฝ๐ฟ๐ผ๐ฝ๐ฒ๐ฟ๐๐ ๐ต๐ฎ๐ ๐ฎ ๐น๐ฒ๐ฎ๐๐ฒ๐ต๐ผ๐น๐ฑ ๐ผ๐ณ ๐น๐ฒ๐๐ ๐๐ต๐ฎ๐ป ๐ฏ๐ฌ ๐ผ๐ฟ ๐ฒ๐ฌ ๐๐ฒ๐ฎ๐ฟ๐ ๐ผ๐ณ ๐๐ฒ๐ป๐๐ฟ๐ฒ
This reason solely depends on the bank. Some banks do not finance loans on properties with a remaining lease of 30 or 60 years. The bank views this type of property as โhigh-risk financingโ as the property value itself drops towards the end of the lease.
If your loan is to get rejected, don’t lose all hope. You might not be able to tick all the boxes at one bank but that does not mean that you won’t be approved at the next one. Most of the reasons stated above depends on the criteria each bank has set for itself. However, it is important to note that you will have to wait 3-6 months before your next home loan application.
