reasons why your home loan application was rejected from

reasons why your home loan application was rejected from

It not uncommon for people to walk into a lending institution to get a home loan only to get out without anything. In other words, we could just say getting a loan today is more challenging than it was years ago.  Here are some reasons why your home loan application was rejected.

How would you feel after finding out that your home loan has been rejected? Depending on the reason, you could either feel disappointed or just walk away in frustration. Lenders consider several factors before granting you a loan. The metrics used by lenders to determine loan quantum and eligibility vary from one lender to another. Here are some reasons why your home loan may be rejected.

  • Poor credit score

Most lenders nowadays rely on the credit score engine for decision-making purposes. The credit score gives an outline of how safely you have handled your money in the recent past. The major credit bureaus provide a credit report which is used to determine your creditworthiness every year. You, therefore, need to correct any problems in your past records and build a strong credit record that lenders would comfortably work with.

  • Frequent job switching

Most lenders stress on job stability and some require that the borrower should have their jobs for at least two years. The lender may also need to consider how stable the company you work for is before granting you the loan.

  • Insufficient income

The lender is likely to reject your loan application if your income is not sufficient for the loan you are requesting. You therefore need to consider if in reality you can afford the loan you are requesting.

  • Inconsistency in the information you provided

If the lender can notice inconsistencies in the information about your income list and that of the the employer, your loan will be rejected. You’ll have to clear such contradictions before the loan can be approved.

  • Low Appraisal

Your loan will fall through when the appraiser submits information to your lender that the home you wish to buy doesn’t deserve the amount you want to borrow.


Your lender may choose not to approve your loan because of your indebtedness in order to avoid adding you more burden. It is therefore advisable to use savings to clear some or all your existing debts prior to loan application.

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