10 Reasons For Home Loan Rejection That You Weren’t Aware Of

After toiling for several months, or perhaps years, you finally save enough money to make the down payment on your dream home. But what happens if you collect all the documents required for Home Loan, and painstakingly fill out the applications, only to find out that your Home Loan been rejected?

Insufficient income and poor credit scores are some of the common causes for loan rejection. There are plenty of other obstacles on your path to loan approval that you might not have even considered to be a hindrance. These factors are sometimes portrayed in a subtle manner on your application. Lenders review many factors before they actually consider approving your loan application.

Here’s a list of reasons that could lead to your Home Loan getting rejected:

1. An Incomplete Education

If you’re a school or a college dropout, getting a Home Loan can be quite a challenge. A minimum qualification of at least a bachelor’s degree assures lenders that the risk of you being unemployed is minimum. Undergraduates have a rare chance of getting their Home Loan sanctioned.

2. Insufficient Work Experience

You might have waited all your life to get that dream house. So once you take up a job with a decent salary, there is a good chance you’d like to apply for Home Loan almost immediately. However, most lenders look for a work experience of at least 3 years, and even if you earn enough money, your Home Loan will most probably be rejected.

3. Stature of your Company

If your company is a start-up or has been financially unstable, the chances of loan rejection are high.

Lenders may ask for financial reports of the organisation you work with. Based on this report they can identify the profit margin of your company and choose whether to approve or reject your application. Lenders can identify if a financial dip in your organisation will have adverse effects and have a negative impact on your loan payments.

4. Change of Career

Job stability is an important aspect lenders consider and financial institutions look for a minimum of 3-year work experience. So, if you’re in between jobs and don’t meet this requirement, your loan application is instantly declined. Being a permanent employee of an organisation and having worked with that particular firm for at least three years is an added benefit.

Even if you choose to quit your job and take up a self-employed venture, the risk of loan rejections prevails. You need to successfully run your firm for at least 3 years. Lenders look for an increasing profit for at least 2 out of the 3 years, to trust you with their loan.

5. Joint Family

While being a part of a large household with your parents, in-laws, siblings, their spouses and children, might make your family ties stronger, it can have an obstructive impact on your Home Loan. Lesser the number of dependents, higher are the chances of loan approval.

Being in a joint family may also lead to situations where you have to co-own properties—maybe a bigger home that you could all live together in. Lenders are particular about the number of co-owners. Most lenders allow only 3-4 co-owners. Some financial institutions may approve up to 8 members as co-owners.

Keep these factors in mind when you apply for Home Loan if you’re living with your extended family.

6. Unapproved Builder and Property

With so many homes and apartment complexes coming up in every city, you can easily get lured into buying a home from an unapproved builder. This not only gets your loan rejected, but you will have to head to a different bank for a loan and you may not be able to get the desired interest rates or benefits.

In rare cases, some builders are approved only by some banks. Finding the right bank can eliminate the risk of the dismissal of your Home Loan.

There are some cases where the builder might be a reputed one and approved by your bank but the project itself hasn’t received an approval. Another possibility is that if the project is enormous, one of the phases could not have been approved.

A quick check on the builder and the property goes a long way, as far as your Home Loan is concerned.

7. Actual Value of Property

If your dream home’s actual cost is lesser than what you’ve received an estimate for, the bank can, and will, reject the loan request. The rejection can occur on the grounds of inflation, where one may have given a greater valuation estimate in order to get a higher loan amount.

You can find banks that overlook this shortcoming and approve your loan with very low rates of interest. The risk of not getting a good deal on the loan, along with the risk of rejection, makes the precise valuation of property a key factor.

8. Age of the Property

Make sure you buy property that is being built with quality standards that will allow it to last for at least the next four decades. Banks and NBFCs are particular about the longevity of the property. 

Most of the policies state that the building should be able to last for a minimum of 20 additional years, once the tenure has been served. If you’re buying an old property, ensure the building meets the required standards before you consider purchasing it.

9. Backing Someone Else’s Property

You may want to do your friends a favour by signing up to be a guarantor for their Home Loan. But think twice before you do this. If you also plan on applying for a Home Loan, this might be a bad idea as it blocks your eligibility to take up a Home Loan by yourself. 

10. Bounced Cheques

Your cheque could bounce due to a signature mismatch or insufficient funds in your account. A signature mismatch can leave a negative impression on your lender’s mind. Insufficient funds only make matters worse as the financial institution might blatantly reject your application.

The fact that your cheque has bounced creates reliability issues at the lender’s end. They might deeply contemplate giving you a loan if you haven’t even maintained the small amount of processing fee required for your Home Loan.

Just having a good credit score and having a high-paying job, aren’t sufficient for a guaranteed loan approval, despite being two of the major factors to be considered when you apply for a loan. Factors like self-contribution amount, the listing of your locale and previous occupant of your property—apart from the aforesaid reasons—can also lead to the rejection of your Home Loan application.

Law and Order in California – New Acts Redefining the State’s Security Measure

There was a time when you could simply hang a shingle and announce your presence in the business world. As long as you are not killing anyone, no legal burden could fall on you. 

However, things have changed a lot than it used to be a decade earlier. Off late, the law and order in California has gone through a rapid change. A lot of state and federal regulations have come up exclusively for the residents and small businesses. 

The introduction of such regulatory acts are primarily meant for accomplishing some important social good like, preventing identity theft, increasing the paperwork burden for small businesses, protecting an individual’s privacy and preventing the occurrence of corporate financial scandals. 

The best part: if you can apply your senses to understand these regulations, the complying part does not look to be much expensive or difficult to follow.

Sarbanes-Oxley Act for publicly held companies

If you are the owner of a publicly-held company, complying with the Sarbanes-Oxley Act is necessary. With the help of this Act, you can set technological standards along with reporting requirements to handle the financial reporting of the company. 

The Act was passed basically in response to recent waves of fiscal mismanagement, outright theft and corporate scandals. With Sarbanes-Oxley Act, a certain set of requirements are placed to establish necessary internal controls that ensure perfect integrity of an organization’s financial data. 

Though the requirements are usually similar for every type of company, the smaller ones enjoy some kind of additional flexibility due to the introduction of Gehreslaw. Small companies are awarded a longer time-frame to become totally compliant to the Sarbanes-Oxley Act. 

But, once this Act is applied, it is beneficial in regulating the access to the financial data through a much secured procedure, generating detailed reports to the government and providing audit trail. Those who follow the best security practices will never find it difficult to incorporate such an Act.

HIPAA for health-care industries

If you are from the health-care industry, complying with the HIPAA (Health Insurance Portability and Accountability Act) is a must. According to this act, any health-care company handling private patient data must guarantee its security and privacy against any kind of unauthorized access. 

With the application of this Act, any company handling any kind of health-care information must take technological steps like, adequate fire-walling, strong double-factor authentication and encryption to ensure the highest level of security.

If you are residing in the State of California or doing business there, you must comply with the SB 1386 ACT. It is also known as The California Information Practice Act, which requires your company to inform its clients and customers immediately in case of any technological discrepancy. 

The biggest technological issue is a sort of hacking and information exposure. The Act has been levied to safeguard the customers and companies against any kind of identity theft. The law also is applicable to subcontractors of the companies who maintain information about the residents of the state.

The State of California is taking ground-breaking initiatives to improve the lives of the residents and those who are doing business in the state. The Federal Law primarily revolves around the California Information Practice Act. 

Being the largest state in the United States, the law and order must be suitable to make things fall in the right place. With some modifications in the law, scenarios seem to be improving for the better.

Frugal and Cozy: How to Save Money on Heating Your Home This Winter

With winter fast approaching, many families are struggling to find a way to control heating costs. You want to make sure you and your loved ones are warm and cozy, but you don't want to watch your heating bill soar, either. 

By utilizing some of these tactics, you can keep your home warm for a lower overall cost.

Inspect Your Heater

If your heater is in need of repair, you can find your heating costs skyrocketing--often without your awareness that there's anything wrong with the heater. 

According to Eagar Heating and Cooling, a company that specializes in heating repair in American Fork, instead of finding yourself in a bad situation as temperatures dip outside, you should have your heating unit inspected before the beginning of the cold season. 

Use Your Fireplace

In many cases, your fireplace will provide cheaper heat than running the heater throughout the house as it can help save on your gas and electric bills each month. 

Whether you're using a wood-burning fireplace or have a gas unit, turn on the fireplace as the nights get cold to help warm up your house. Keep in mind that using the fireplace also allows you to heat a single room in your home, rather than having to heat the entire thing. 

However, depending on where your fireplace is located, and how big it is, you do have the potential to heat your entire house. 

Dress in Layers

Do you find yourself warring over the thermostat every winter as members of your family push it higher while you struggle to keep it on a lower heat setting? Try encouraging the members of your family to dress in layers. 

There's nothing wrong with wearing a hoodie or a warm sweater inside, and you may find that it makes it easier to turn the thermostat down a few degrees. 

This will help you save on the energy bills each month, especially if you don’t have access to an alternative heating system such as a fireplace.

Seal Cracks and Crevices

If all of your warm air is allowed to escape your home, it can cause a problem with your energy bills and make your heating system work harder than what it should. 

Check the seals around your windows and doors to ensure that they aren't letting any cold air into the house. If it's particularly cold, a towel tucked at the bottom of the door frame or in the windowsill can make a big difference in how much cold air is able to creep inside. 

Try to get a good look at your doors and windows early in the season and seal any places where cold air is sneaking in around the edges. Pay particular attention to windows in older homes, which may not be sealed as well as new models. 

Take Advantage of Sunlight

Sealing the cracks around the windows doesn't mean closing them off entirely! During the warmest, brightest part of the day, take advantage of sunlight to warm your home. 

Open the blinds or curtains and let the sunlight in, especially if you have thick, double-paned windows. At night, however, make sure your blinds or curtains are in place to help trap cold air and prevent it from coming into your home.

Keeping your home warm and cozy all winter long doesn't have to mean suffering financially every time you open a new bill. 

By utilizing these tactics, you can keep your heating needs more manageable and ensure that you're able to enjoy the winter season to the fullest.

How to Get Your Financial Life Back on Track After a Bankruptcy

When your financial situation reaches the breaking point, it may become necessary to file for bankruptcy. Whether it is chapter 7 or chapter 13, bankruptcy can be a useful tool to relieve the strain of mounting debt problems. 

Even though this can often result in a loss of assets and a lengthy time of adjusting, at some point you must decide to pick up the pieces and start over. 

Here are a few tips to help you get started down the road to recovering your personal financial situation after a bankruptcy.

The 10-Percent Rule

As with all rough financial situations, a lack of funds and a tiny savings will only make the matter worse. 

The first plan of action to get your finances back on track is to begin to generate a sizable reserve to have for emergency situations. According to Bank Rate, saving 10-percent of your regular income is a good rule of thumb to help restore your financial reserves. 

By doing this consistently, you will empower yourself to make meaningful strides to become financially secure again.

Rebuilding Credit

Although your bankruptcy has done a number to your credit, it is important to begin immediately working to rebuild your credit as much as possible. 

The better your credit score, the more flexibility you will have while you bring your finances back to a functional level. 

To assist you in this endeavor, it may be necessary to speak with a consumer credit counselor to help you determine the best course of action to take to rebuild your credit in light of your current financial situation. 

Though it will not be easy at first, persistence is required to get what you desire as you reestablish your credit.

Borrowing Money May Be Easier After a Bankruptcy

When people imagine going through a bankruptcy, they often jump to the conclusion that no one wants to lend money to them for years to come. 

Although you will be viewed as a subprime customer, where rates and penalties will be higher, the truth is that many lenders actually see a person who has just finished going through bankruptcy as a safe bet.

One reason driving this perception is because current laws prohibit such individuals from filing a second bankruptcy for a number of years. 

This means the lending institution can get you at a higher interest rate and lock you in without the worry of you filing another bankruptcy any time soon.

Navigating the Murky Waters of Bankruptcy Law

Since a bankruptcy is such a life-altering experience, it is always a good idea to consult with a professional bankruptcy attorney from a firm like Lazaro Carvajal. to make sure everything occurs smoothly and that you are not hindering your own financial recovery efforts once the bankruptcy has been executed. 

A good bankruptcy attorney will not only hold your hand through the legal process, but they will be able to steer you in the right direction to begin your financial recovery efforts with the added experience of helping numerous other people in your diminished financial situation.

After bankruptcy has been filed can often be a scary, uncertain time for those undergoing this process. Rather than wasting time feeling bad about an uncertain financial future, it is best to focus on rebuilding your financial base as soon as possible. 

When you focus on making positive strides forward, this helps to leave the financial unpleasantness in the past.