Customers who are denied a home loan are still not sure why their loan application was rejected. When the bank approves your loan application, they will assess and evaluate many factors to decide whether to lend you. So what indicators will the bank assess?
There will usually be 3 most common questions that any bank evaluates when approving a loan application.
Can you be able to pay the debt?
One of the most interested ratios is your solvency.
From the total amount of money such as personal income, spouse’s income, minus basic family expenses, minus costs for existing debts, compared with the principal interest payable if disbursed the loan, will Show your solvency. When planning a home loan, make a temporary calculation on your family’s proof of income, but don’t forget to list unproven earnings for bank officials.
You are eligible but are you willing to pay off the debt?
Your credit score will affect this question yourself. If you have a bad debt (more than 90 days overdue and worrying debt repayment capacity), you will most likely not be able to approve the loan. Whether paying bad debts, CIC (Credit information center) will still save information about this debt for a period of 2 years.
Many customers were surprised when they rejected a 1 billion loan, just because 1 unsecured loan is worth 1 million VND to pay back students, even though he can prove his solvency is too much to pay new loan
Therefore, make sure you have a good record: paying all current loans on time. If possible, ask a banker to check CIC to know about all the debts you have on the system. You cannot be sure that your future will not borrow from the bank, right?
What if you can’t pay the debt?
In the worst case, the bank wants to know if any tangible assets can be liquidated to pay the debt.
For example, last month you bought a $ 75,000 apartment but currently, the bank only lends you $ 40,000. The reason is that banks rarely sell liquidated assets at cost. Your secured assets are valued at a high or low price depending on their quality and liquidity. Therefore, you should prove your collateral is highly liquid.
We have listed 3 important information as above when the bank approves loan documents. Wish you find your dream home.