The specific dread
Literary horror requires a threat that is exactly right for its protagonist — one that has the specific shape of their particular fears, vulnerabilities, or guilty knowledge. A ghost story is generic; a ghost story in which the apparition takes the form of the specific thing this specific character cannot face is literary horror. Start by asking what your protagonist most fears losing, most refuses to acknowledge, or most deserves to be confronted with. The horror grows from that answer. The best literary horror feels inevitable from the inside of the character's psychology: the reader should be able to see, in retrospect, that this was always coming for this person.