Having your own house is the dream of many people. Some can get it easily but some need to do a lot of effort. One of the best ways to make the dream come true is to apply for a mortgage loan. The most disheartening thing in this entire world is if the person’s Mortgage application gets rejected. So it is very important to apply for the loan appropriately and fulfill all the requirements well. Even it will be great if the person has a good idea about the best mortgage rates in UAE.
There are certain common reasons for the rejection of mortgage applications. It will be better if the person knows them well and try to avoid them. Let’s have a look at them.
- Poor credit score: Almost every bank and financial institution always look for the credit score and accordingly accepts or rejects the application of the person. So it is very important for the person to maintain a good credit score and even the person can check it on the official website of Al Etihad Credit Bureau a government-owned credit score rating firm in UAE. A person with a low credit score can only apply for the loan only if he/ she improves the credit score.
- Eligibility criteria: Even if the person is not meet certain eligibility criteria of applying the mortgage applications, there are high chances of rejection. The nationality of the person plays a very important role in the approval of the loan. So it will be great if they contact the mortgage advisor to know the details that need to be meet up for the loan. This is how the chances of rejection of the application can be reduced. Misrepresentation issues: For the application of the loan the person needs to represent a lot of things. It is very important on the part of the person to represent true things. Never be dishonest at any part because banks have access to all information. Any misrepresentation can cause the rejection of the loan application.
- Mortgage affordability: The banks evaluate the person’s affordability according to the financial status. Different methods are considered for the calculation of affordability some consider 50% of monthly income and deduct the 50% of monthly liabilities to pay. If the affordability is not sufficient, there are great chances of rejection of the mortgage application.
- Stress rate: It is a rate implemented by the lenders to check whether the person will be able to handle the increase in the interest rates in the future. The policies related to this rate vary with banks and financial institutions. To avoid such scenarios of rejection, it is important to take the advice of the expert person. They will advise with some suggestions that will be great to deal them.
All these are common reasons for the rejection of the loan that can be easily avoided. For more information and advice, the person can contact the best home loans in UAE for expats. They will ensure that the person undergoes the smooth process of application for a loan.
