Banks are pretty choosy to begin with when it comes to lending. But ever since the latest MAS cooling measures took effect, getting a home loan has become more challenging.

But if you fall into any of the following three categories, chances are high that you’ll get your home loan rejected:

• You have a bad credit history
• You have a high Total Debt Servicing Ratio (TDSR)
• You are trying to buy Geylang Property

If you find yourself rejected for a home loan because you fall into one of the categories above, you can still appeal the rejection.

While there’s no guarantee these strategies will be successful, they will give you a shot at home loan approval:

Bad Credit – Try Financial Institutions

If you’ve filed for bankruptcy, having a letter of discharge isn’t enough – you’ll have to wait years before you can get credit again. Local banks usually grant credit after five years, while foreign banks can make you wait up to seven years.

Your credit score factored from the Credit Bureau Singapore also affects your borrowing power. If you’ve been late by at least two weeks on a credit card payment, that’s enough to give the banks worry.

If you can’t wait years to repair your credit, you can get financing from a legal financial institution. However, there are two things you must know:

• You must at least clear any outstanding debt you currently carry.
• You’ll have to pay a higher interest rate on your home loan.

Some alternatives that you can try are Singapura Finance or Hong Leong Bank Singapore.

High Total Debt Servicing Ratio (DSR) – Adjust the Loan Quantum

Your Debt Servicing Ratio (TDSR) measures your income against your total monthly debt repayments such as your car loan, credit card payments, and any personal credit line. If your TDSR exceeds 60%, your home loan will get rejected.

If this happens, you have several options to lower your TDSR:

• Reduce the amount you want to borrow (loan quantum).
• Extend your loan tenure to reduce your loan repayments.
• Find a cheaper house and adjust your loan quantum or tenure.

Buying Geylang Property – Find the Right Bank

Despite being a central location, Geylang’s reputation as a “red light” district negatively affect property values. Because of this, many banks refuse to finance property along “certain” lorongs in Geylang.

Local banks usually shy away from financing Geylang property, but foreign banks are more open-minded n their lending and may give you the home loan you’re looking for.

It would be best to secure an In – Principle – Approval with some banks first, before committing to a property, so that all this can be avoided.