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07 March 2011

Why was my Home Loan Not Approved Because of Age?

Home loan approval is one matter of stress for every applicant. Owning a dream home by taking loan is the easiest way to fulfil our dream of a home. Loan application procedures and approvals are dependent on every loan lending institution. The borrower has to do market survey and talk among friends and relatives to come up with the best home loan deal. The most important point in loan approval which is not talked much about is the age factor.
Why does age matter in home loans? Yes age does matter as the lender sees your productive years after taking the loan. The individual has to repay the loan for a fixed tenure maybe 10 , 20 or more years. Will their financial standing be the same after so many years? They may happily give a loan for a younger individual who is salaried but hesitate to offer loan to a borrower who has crossed 45 or 50 years of age. This in no way means that your loan will not be approved. The lender will critically appraise your assets and expenditure habits. Your credit report will indicate your financial standing. Documents and proofs of your assets like house e, car and other property will give the assurance to the lender before approval for the loan. It is not the fault of the lender as they have to consider the repayment capacity of the individual for the next say 20 to 30 years.  The younger loan applicant will have salary proofs and is expected to work till the workable age limit decided by the government. Hence it is understood that their salary will increase over time.  Most lending institutions though critical about accepting loan applications from older and middle age groups are open to this as most of the applicants here have independent properties and also vehicles of own. They may have a substantial bank balance and assets that can be an assurance to the lender in case of failure on the borrower to repay the loan on time. The lender will also go through all the documents that will assure that the loan will be repaid on time. Usually borrowers also go in for mortgage loans where other property of the same value or more is mortgaged to get another new home loan.
The lender may be hesitant to approve loan but they will definitely not leave aside this age group of applicants only for this one reason of age. They cannot let go of such a cream of individuals who are financially well settled and stable in assets as loan takers.  Also many people of this age group have a home of their own and are opting for a home loan for a second home or for investment purposes.

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