What To Do If Home Loan Denied By The Bank Against Builder?
A home loan is denied by the bank, against the builder. How can we assess the issue & know that in future, the bank will not & cannot have any litigation on the project & the builder?
- Sector-1, Noida
Well, there may be many reasons for a home loan rejection - some common and some not so common or lesser-known. Let's take a look at six uncommon reasons:
1. Builder not approved This is one of the most common but unexpected reasons for the rejection of a home loan application. Not all banks give loans against the property of builders. It is, therefore, critical to know from the builders themselves that which banks have approved them and which have not.
2. Builder approved but property not approved This is another unexpected reason for a home loan rejection. A builder, for instance, may figure in a bank's list of approved builders, but a specific project launched by him may not have been approved by the concerned bank. In addition, there are likely to be cases where particular phases of a project (if it's a large one) may not have bank approval. Thus, to avoid unexpected home loan rejections, it's important to check that apart from the builder, the entire project - including its different phases - has got the necessary bank approval.
3. If the previous tenant was a defaulter Many housing finance companies (HFCs) these days blacklist both the defaulter and his residential address. Therefore, if you are staying in a house which is in a bank's defaulters' list because of the previous tenant who defaulted on a loan or credit card payment, there are high chances of your home loan application getting rejected. However, even if a particular address is not in the defaulters' list, then there is a possibility that the very locality is not in the good books of the banks/HFCs because of some other reasons. Your loan application may get rejected in such a case.
4. Credit history issues Many people do not check their credit scores and are mostly oblivious to the same. For instance, a survey conducted by credit health improvement company Credit Sudhaar sometime back had revealed that more than 85% of the respondents were unaware of credit bureaus, while a whopping 92% didn't know their credit scores. No wonder loan rejection because of credit score issues comes as a surprise to many loan takers.
5. Unstable employment Lenders place a lot of importance on job stability and certain banks even insist that an applicant needs to be employed with a concern for three years or more to be eligible for a home loan. In other instances, where the builder is not paying EMI, under the subvention scheme or the Builder is not buying back the property as promised in the terms and conditions of the subvention scheme agreement or cancellation of the allotment, a home-buyer has a legal right to file a complaint to get the legal recourse. At last, we can infer that in case of subvention scheme if any of the buyers is troubled due to the non-performance of the builder then RERA can play a pertinent role to bring justice.
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Answered on 17 Jul 2019
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