‘Home loan ap­proval at 73.8pc last year’

New Straits Times - - Business -

KUALA LUMPUR: The As­so­ci­a­tion of Banks in Malaysia has clar­ifed that loan ap­pli­cants that meet a bank’s cri­te­ria will not be re­jected and that the ap­proval rate of hous­ing loans last year was at 73.8 per cent, in re­sponse to the dif­fer­ent sta­tis­tics on hous­ing loan re­jec­tion rates raised by banks and de­vel­op­ers.

“Such dif­fer­ences may be due to dif­fer­ing sta­tis­ti­cal ap­proaches used by each in­dus­try. The ap­proval rate takes into ac­count hous­ing loans ap­proved by banks and ac­cepted by the bor­row­ers, as well as hous­ing loans ap­proved by banks but can­celled by bor­row­ers.

“Banks also gen­er­ally do not in­clude ap­pli­ca­tions with in­com­plete doc­u­ments when cal­cu­lat­ing the ap­proval/re­jec­tion rate. As with other loans, one of the key fac­tors that banks would con­sider is the ca­pa­bil­ity of the ap­pli­cant to re­pay the loan,” it said in a state­ment.

The as­so­ci­a­tion said a bor­rower would have a higher chance of suc­cess in his ap­pli­ca­tion by check­ing with the bank to see how much he is el­i­gi­ble to bor­row to pur­chase a prop­erty, based on his ex­ist­ing in­come, ex­penses and other loan re­pay­ment com­mit­ments.

“He could also en­sure that he is not over-lever­aged and has the abil­ity to prove fi­nan­cial ca­pa­bil­ity to make monthly re­pay­ments. As a gen­eral rule, monthly home loan in­stall­ments and other debt com­mit­ments, such as hire pur­chase fi­nanc­ing, should not ex­ceed 40 per cent of the ap­pli­cant’s gross in­come,” it said.

Other fac­tors in­clude hav­ing a good credit record by keep­ing all pay­ments up to date on ex­ist­ing credit fa­cil­i­ties or li­a­bil­i­ties, as well as ful and ac­cu­rate dis­clo­sure of all ma­te­rial in­for­ma­tion with re­gard to his fi­nan­cial po­si­tion when ap­ply­ing for a home loan.

With a wide range of home loan prod­ucts avail­able in the mar­ket, the as­so­ci­a­tion said it was cru­cial that when cus­tomers shop around for a loan, they must iden­tify the loan fea­tures that are im­por­tant to them.

“Home buy­ers must be aware of the fac­tors that banks take into ac­count in eval­u­at­ing a hous­ing loan ap­pli­ca­tion, which may in­clude the lo­ca­tion of the prop­erty, the ap­pli­cant’s credit rat­ing, con­duct of ex­ist­ing loan ac­counts and ca­pa­bil­ity to ser­vice the debt,” it said.

Mem­bers of the pub­lic with en­quiries or com­plaints re­lat­ing to hous­ing loan mat­ters can con­tact the as­so­ci­a­tion via its ABMCon­nect hot­line at 1-300-88-9980, or via email at eABMCon­nect by log­ging on to its web­site, www.abm.org.my.

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